Introduction
Scenario planning is a methodology that uses the inherent human capacity for imagining futures to better understand the present situation and to identify possibilities for new strategy. It is applied mainly in institutional planning contexts, such as businesses, government agencies, and intergovernmental bodies, as well as in not-for-profit and community contexts. In this chapter we describe the distinctive features of the Oxford Scenario Planning Approach (OSPA) methodology and its focus on supporting and informing new approaches to strategy and policy in contexts that exhibit turbulence, uncertainty, novelty, and ambiguity (TUNA—these terms will be explained in detail).
Intervening Effectively in an Unpredictable World
Since emerging in the 1950s/1960s, the persistence of scenario planning as a methodology is quite remarkable in a field of practice—strategy—notable for transient fads and fashions. In recent years there has been a growing scholarly interest in scenario planning as evidenced by the extraordinary rate of growth in related peer reviewed papers in English alone. It seems plausible that the growth is part of a search for new ways of surviving and thriving in a more globally interconnected world, with the potential for new and bigger surprises for entire communities, companies, and countries. These include various crises in public trust and national security, such as the 9/11 events and subsequent developments, and the 2008 global financial crisis and its aftermath, which include impacts well beyond the financial system such as a Grexit situation and unprecedented high levels of youth unemployment. There is growing appreciation that more disruptions are waiting in the wings—a global migration crisis, a food-water-energy resource stress nexus, climate change, and asymmetric impacts of new technologies such as winner-takes-all outcomes of the digital economy. The list is endless but the diagnosis is common: we now all live in an era of connected challenges, and connectivity is the key driver of value and vulnerability.
For some people with responsibility for strategy or public policy, the wider environment is increasingly perceived as fast shifting and less predictable. Traditional planning approaches seem inadequate. Uncertainty is unsettling and creates anxiety for the expert. For others with strategic responsibilities, the challenge is how to engage with fast moving and novel situations characterized by ambiguity. Relying on trend analysis and projection is not enough to guarantee future success in these conditions. For example, when looking at the implications of a combination of current trends—zero-marginal-cost businesses, the rise of the peer-to-peer economy, the automation of more and increasingly higher-skilled jobs—some suggest that we are entering a new era of self-generated work. The implications of this for the social contract between citizens and their governments is difficult to comprehend; what might this hold for income tax revenues, for markets, for pensions, for public institutions?
Any of the four TUNA elements can trigger a search for methodologies that enable new and better strategies. Many individuals and institutions feel they currently face, or will in the near future confront, disruptive changes as they pursue their goals and interests (commercial or otherwise) in competition or collaboration with others. While the experience of sudden, disruptive change is not a particularly new phenomenon, there are a number of reasons why the current era is, or seems to be, triggering a strongly felt need to develop new strategies not only to cope but also to do well in TUNA conditions. We argue in this book that the Oxford Approach to scenario planning is a promising and useful methodology for strategists and policymakers dealing with these conditions.
Balancing Competitive and Collaborative Tendencies for more Effective Future Preparedness
More broadly, research on turbulent environments has for decades suggested that the focus of attention for strategic managers shifts from tactics through to engaging a wider and more complex set of stakeholders in strategizing as turbulence becomes more salient. Social scientists Fred Emery and Eric Trist, in their 1965 paper, proposed that in “turbulent fields” (TUNA conditions) strategy requires collaboration and realignment of values.
Established collaborations can also, however, become misaligned with the complexity in the wider field they are meant to engage with strategically. World War II institutions such as Bretton Woods and the UN no longer appear capable of enabling sustainable value creation in an era of high-tech entrepreneurial capitalism, climate change externalities, or complex global issues such as tax avoidance. Many new technologies appear to be supporting the social need to collaborate—with virtual community, the proliferation of open-source systems, frugal and social innovation, and shared and circular economies. As Harvard’s Martin Nowak (2006) declared in an overview of the evolution of cooperation, “Perhaps the most remarkable aspect of evolution is its ability to generate cooperation in a competitive world. Thus, we might add ‘natural cooperation’ as a third fundamental principle of evolution beside mutation and natural selection.” Clearly we are in an era where the “rules of the game” not only need to be rewritten but are being rewritten from the bottom up, rather than through top-down reforms.
The proliferation of multi-stakeholder scenario planning by cross-sectoral social partners (such as those found in the Appendices for AIDS in Africa (AiA), the futures of risk, or the futures of gastroenterology) is one manifestation of the need to strategize anew in TUNA conditions. Many such initiatives operate as temporary institutions that seek to enable and sustain collaboration to transform field-level issues, practices, and relationships.
The OSPA offers strategists and policymakers the means to use scenario planning to find options that balance the competitive and collaborative tendencies that are now needed to survive and thrive in a world beset with TUNA conditions.
A Shift from Prediction to Reframing
We suggest policymakers and strategists in TUNA conditions might be well advised to adopt a phenomenological approach to strategy development, which we contrast with the more traditional “predict and control” approaches (Selsky et al. 2007; Ramírez and Selsky 2015). A phenomenological approach to strategy is grounded in the lived experience of strategists, and gives higher priority to individual and organizational learning (Michael 1973; de Geus 1997) than to control or positioning. It is based on a creative and disciplined process of discovery, interactive immersion,1 and invention. In many institutional settings the resulting strategy-as-learning process can clash with the dominant mode of time-bounded, project-based activities, so extra care needs to be dedicated to making the approach acceptable.
The essence of the Oxford Approach to this strategic learning process, we believe, lies in an ability to reperceive self-interest and options, and others’ interests and options and experiences—all enabled through a process of reframing.
In the 1950s, economist Herbert Simon, a Nobel laureate, highlighted a form of limited reason that he characterized as “bounded rationality” and argued it applied across all professional fields. More recently, Donald Schön and Martin Rein (1995) highlighted another form of limited reason that they believe applies across all professional fields, as soon as one moves beyond mere analysis of facts to make professional recommendations, which they call “design rationality.”
While Simon’s notion of “bounded rationality” explains realistic cognitive constraints within which professionals act, Schön’s notion of “design rationality” also concerns limits but emphasizes the possibilities for developing exemplary practice, such as scenario planning (see Box 1.1).
Box 1.1 FROM BOUNDED RATIONALITY TO FRAME REFLECTION
In their 1995 book, Schön and Rein reviewed the theory base underlying the three most common means of dealing with intractable policy problems: (1) “rational” policy analysis, (2) power politics, and (3) mediated negotiation.
The dominant tradition of policy choice is based on the rational actor model; it treats disputes as instrumental problems that can be solved through the application of a value-neutral policy science. The political perspective is a pluralist model in which policymaking is seen as a political game of multiple rational actors, each with his own interests, freedoms, and powers. Consensual dispute resolution through joint gains is the theme of mediated negotiation.
A large and important class of policy disputes has proven resistant to these three main traditions. The authors proposed a fourth way of making sense of intractable policy controversies, which focuses on getting at the underlying structures of belief, perception, and appreciation, which they called “frames.” The idea is that once actors in the dispute can get a better understanding of their underlying assumptions and frames, they can begin to shift their often tacit and untested ways of seeing the world and the issue. This fourth approach can lead to a better understanding of the arguments each side is making, and to a more reasoned approach regarding what “data” are relevant to the situation. They characterize this fourth approach as “design rationality.”
The Reframing-Reperception Cycle is at the Heart of the OSPA
Reframing helps people to become mindful of the frame they have been using to make sense of and intervene in the world, as well as what is left out of this frame. As we will explain, reframing occurs in the process of scenario planning when alternative scenarios describing future contextual environments are contrasted to reveal, test, and redefine the official future (given frame), to generate plausible alternatives, and in effect generate new shared knowledge and insights. By rehearsing actions with these alternative frames, new and better options for action can be identified and contribute to a reperception of the present situation. Thus, in the OSPA one learns about the present with views regarding the future—not about the future from the perspective of the present. Moreover, in the OSPA this learning is not just performed during an episodic intervention; instead scenario planning is a sustainable, iterative way of relating to the TUNA conditions in today’s world—scenario planning is an interactive process. So in the OSPA strategists using a scenario planning intervention are considered learners. These learners seek to reframe strategy and reperceive options for action.
Although this learning process applies to individuals as much as to groups, scenario planning learning can be enriched when done in a social setting. This requires strategists to design, manage, and be articulate in the “strategic conversations” that matter (van der Heijden 2005).
In this book we explain how scenario planning enables this process of reframing and reperception to support distinctive approaches to strategy. We first reflect on some general misunderstandings about scenario planning and then describe the seven premises that underpin the OSPA. These premises structure the characteristics of the methodology.
Navigating the Rich History of Practice and Challenging the Poverty of Shared Wisdom
Surveys conducted by the US strategy consulting firm Bain and Co. show that a high level of satisfaction with the use of scenario planning combines with fluctuating rates of use, with periodic spikes in interest.2 Influential players in the world of business and policy, such as the Secretary-General of the OECD, consider that scenario planning “is needed more than ever.”3 However, data on scenario planning use can be misleading, as the term “scenario planning” can be used to mean very different things in different organizations, thus making overall assessments of use or effectiveness practically impossible.
The sheer volume of publications on scenario planning makes it difficult for an experienced hand, let alone a novice, to navigate the relevant literature. The growing body of work—dealing with great differences in approach, criteria for effectiveness, techniques, and methods—appears to be increasingly fragmented, and is located within different scholarly fields and professional communities. In addition, there are no barriers to entry; everyone seems to be able to “do” scenario planning, and no professional qualifications are required. As a consequence many people don’t know how to do it well. While evidence of allegedly effective engagements is becoming commonplace, so too are examples of much more questionable work with the label “scenario planning” attached to it. As in many other hybrid fields of practice-cum-scholarship, not every published paper on scenario planning claiming “good” or even “best” practice is of high quality, replicable, testable, usable, or even interesting.
As a consequence, a variety of methodological approaches have become established over the last sixty years. As we noted in the Preface, one such approach—the OSPA—has been developed by the authors of this book in collaboration with Kees van der Heijden during the last twelve years at the University of Oxford, in what is now Green-Templeton College, the Saïd Business School, and the Smith School of Enterprise and the Environment, with roots in the corporate scenario planning practices in Royal Dutch Shell. The results of this activity are evidenced in the semi-annual week-long Oxford Scenarios Programme which has graduated over 500 executives, the tri-annual Oxford Futures Forum, in other programs and events delivered in Oxford, and in numerous publications and presentations.
Introducing the OSPA: seven key premises
The central purpose of this book is to lay out what has become known as the OSPA. It is our aim to make this approach available to a wider set of readers than those able to attend scenario planning and related programs offered at the Saïd Business School at Oxford. This book offers the benefits of more than one hundred years of combined reflective practice and expertise among the developers of the OSPA. It explains from our particular point of view why, how, and when scenario planning is helpful. The intention is to help scenario users (what we will call scenario planning learners), strategic planners, and scholars to develop good practice and to navigate common traps, hazards, and pitfalls that can turn good practice into bad—using “cats eyes” (see Box 1.2).
In this chapter we first outline key premises that underlie the OSPA. These are not characteristics or features of the OSPA, but foundational ideas that underpin the practice of scenario planning. Next, we outline the central social and cognitive features of the OSPA, features that distinguish it from other scenario planning approaches (see Box 1.3). Key premises and central features are the subjects of the next two sections.
Premise #1—Many organizations are facing unprecedented TUNA conditions.
People have always had the feeling that “change in our times” seems faster and more profound than in the past. So how seriously can one take contemporary claims of “more turbulence,” typically expressed as an accelerating pace of change driven by more connections and technology,4 and increasing disruptive and sudden surprises?5
Box 1.2 CATS EYES
In this book we distill a number of principles, articulate a number of concepts, and proffer a number of ideas that we consider guides to good practice in scenario planning. We think of these principles, concepts, and ideas as having the same role as “cats eyes”—beads of glass that are placed in steel-reinforced casings sunk into the asphalt along the painted lines of rich-country main roads, which reflect the headlights of cars at night. These bright spots of reflected illumination help guide the drivers and prevent them from going off the road. In a similar sense, the principles, concepts, and ideas found in this book are meant to help guide good work and prevent reflective practitioners from inadvertently leaving the road of good scenario planning practice to end up in the ditches of disappointments and dashed hopes, or become stuck in the muddy fields of what Bruno Latour (2010) called “methodological fetishism.”
Box 1.3 SEVEN KEY PREMISES THAT UNDERPIN THE OSPA
There are plenty of time-series data indicating greater price volatility, or depicting the asymptotic potential of continued trends in resource consumption. But there are no widely agreed objective measures of turbulence (or of uncertainty, novelty, or ambiguity in a given strategic situation)—either experienced or perceived as potential—that can be used to benchmark the present with prior years, decades, or centuries; assessments often boil down to subjective and intuitive assertions. Relying on the supposed ubiquity of TUNA as a justification for scenario planning requires us to consider other ways to substantiate the claim.
First, support comes from studying the reasons given for the increased use of scenario planning that are cited within the literature and told to us by participants of the Oxford Scenarios Programme. These variously suggest reasons of accelerating change, increasing complexity, and unpredictable uncertainty as a strong impetus to replace earlier “predict and control” approaches to corporate strategy and risk management. These reasons are quite similar to the arguments for scenario planning made several decades ago by Pierre Wack, a highly influential corporate practitioner of this methodology (see Wack 1985a, 1985b). We refer to several of Wack’s key ideas throughout this book.
Many attempts have been made to explain turbulence as a sense of faster paced, disruptive reality using causal lines of reasoning. Climate change is an example of this. The level of atmospheric carbon dioxide now exceeds that ever encountered in all of recorded human history. “Climate change” now looms large in our collective imagination, but (or because) its impacts and the timing of those impacts remain uncertain.6 Other causal lines of reasoning concern possible tipping points leading to irreversible consequences associated with population aging, inequality, and the consumption of natural resources exceeding planetary limits. Neo-Malthusians offer compelling stories of water wars, famine, and energy blackouts. It is not unreasonable to consider these changes to be unprecedented, and to consider as novel how they manifest in the context of what companies and institutions are doing, trying to do, failing to do, or not doing.
For public sector organizations in particular, an important aspect of today’s significant challenges and contemporary worries lies in the mismatch of fast moving, connected events and issues (that is, emerging “horizontal” issues such as climate change or resource scarcity) and the slow pace of institutional responses to adapt to the changing circumstances, and even to reinvent themselves (that is, the “vertical,” bureaucratic structures). Given this mismatch between faster feedback loops and the slow pace of institutional innovation,7 the anticipation of increasing TUNA disruptions does not seem outrageous.
Yet it is also essential for effective strategy to maintain a realistic sense of the hope for new and better possibilities in the future, and to seek to develop the new and unprecedented possibilities that new collaborations promise for realizing many of these. In the OSPA, we reject the concept of the future as all good or all bad and instead think of it as latent potential.
The Belgian Nobel Prize winning chemist Ilya Prigogine examined the origins of change in the reactions he studied. He concluded that all systems that are sufficiently complex can develop unpredictable emergent behavior. This includes social systems. The origins of this conclusion lie in positive feedback loops embedded in the system, producing boom and bust behavior that is difficult if not impossible to predict. From this he surmised that denser systems (for example, increasing population density and communication links) will produce more turbulence, that is, more complex interactions that produce virtually unpredictable emergent states and patterns of behavior. This has worrying implications for corporate strategists and public sector policymakers (see Selsky et al. 2007). Our colleague Mary Bernard (2008) introduced these ideas in the scenario planning field.
What do we mean by turbulence?
As we mentioned earlier in this chapter, the late social scientists Fred Emery and Eric Trist (1965) studied the options that organizations could consider in conditions of what they labeled “turbulent field environments.” They were very specific in their definition of the “causal texture” of the environment an organization and its leaders might find themselves in. They noted that when a high rate of change combines with high complexity to produce high uncertainty for people inhabiting that environment, the resulting texture of turbulence would be unsettling. Turbulence8 involves either the experience of actual change—or the expectation of it—so significant that it could fundamentally transform one’s situation in ways that could overwhelm one’s capacity to adapt (see McCann and Selsky 2012; Ramírez and Selsky 2015).
We extend their ideas on turbulence and associated uncertainty to also emphasize dimensions of novelty and ambiguity which help scenario planning to grapple with complexity (Wilkinson et al. 2013).
Our research is based on scenario planning as it relates both to single organizations (typically corporations such as Wärtsilä and Shell in the Appendices) and public, often multi-stakeholder situations (such as the AiA, Risk-World, European Patent Office (EPO), and UEG cases in the Appendices). In TUNA conditions even the single organizations benefit from extending their strategizing interactively (Normann and Ramírez 1993) to engage key stakeholders, as we show in this book, often helped by scenario planning. The OSPA is useful in both situations.
Premise #2—TUNA conditions require new approaches to strategic and policy planning that seek to balance competitive and collaborative opportunities.
Our experience of conventional strategic and policy planning processes is that, paradoxically, they focus attention on what happened in the past. In TUNA conditions we argue that success might require different ways of coping than those that were successful in non-TUNA settings. And we show that scenario planning is a good way to achieve this reallocation of attention so that the future in the present is given more priority, thereby helping strategists to avoid what would otherwise remain missed opportunities.
Premise #3—An explicit and flexible sense of future is called for in TUNA conditions. It can be enabled by contrasting plausible, alternative future contexts through an iterative process of reframing and reperception.
The sense of future is an aspect of our present—manifested perhaps as hopes and fears, as expected opportunities, and as plans. We call it a “sense” because emotion plays an important part in how the future is sensed in the present. As we explain, this sense of future can be enabled by contrasting plausible, alternative future contexts of a specific situation of a specific person or group of actors through a cyclical process of reframing and reperception repeated over multiple iterations.
In TUNA conditions, the motivation for scenario planning is not to find “the right answer” to “the” (already posed) “problem” that confronts the strategist. Instead, attention is redirected to reconsidering assumptions and to asking better questions through a process of discovery, interactive and immersive learning, and invention. This has several implications. First, this process enabled by scenario planning provides new conceptual frames to appreciate and interpret changes in the wider context that are relevant to a situation of concern facing a group of scenario learners. As is shown in Figure 1.1, with scenario planning the learners temporarily consider the here and now from an imagined set of perspectives in the “there and then” of the future.
Figure 1.1. The “there and then” and “here and now” in scenario planning
Second, this process enables the learners to develop their capacity for framing and reframing their situation in ways elaborated through the application of Premise #4.
Reframing is enabled by articulating plausible, often emerging stories, and supports the learners to reperceive their world and to bring forth new options for action. For this reason, as we explain in Chapters 2 and 3 respectively, scenario planning involves both social and cognitive processes. Scenario planning can be an episodic activity, like a one-off intervention or a project with a due date, but its reframing-reperceiving backbone implies that it is more effective if done iteratively.
Premise #4—The “aha” moment of impact is only realized once the reframing-reperception cycle has been completed. This can require several iterations.
In conceptualizing any situation one has already “framed” it: something is in the frame and other things are left out. This happens whether one is attending to this explicitly or not. Reframing occurs more easily among people in conversation than individually (van der Heijden 2005). Reframing occurs through strategic conversations that explore new territory, and that accommodate disagreement and render it a productive asset. Scenario planning supports these with a combination of rigorous open systems thinking and imaginative storytelling. These help to co-create a set of plausible and contrastable future contexts that can, in turn, be used in a process of immersive learning to rehearse actions and stimulate reperception of the present situation. Reperception happens when people experience what the future frame feels like and what options it opens up (or closes down).
According to van der Heijden (2005), a strategic conversation sweeps in both attention to the context as well as to the business idea at play in a strategic situation. Scenario planning invites multiple framings of a situation into a strategic conversation. Each frame enables more and different options to be designed and tested and in turn helps strategists to develop a unique strategy.
Premise #5—A culture of learning supported by scenario planning can avoid the extremes of groupthink and fragmentation, which are pathologies preventing learning in organizational settings.
Scenario planning can sustain individual and organizational learning by redirecting attention to changes in the context and how these are framed, by whom, and for what purpose. This redirecting of attention helps to avoid the positive feedback loops that build up in groups and become the pathologies of groupthink and fragmentation that can hamper collective learning.
This recasts the role of the CEO, policymaker, and strategist using scenario planning processes as chief learning officers, rather than plan makers or commanders of predictable actions. The scenario planning process both embodies and supports the collective learning taking place in the process. This is not a trivial matter—De Geus (1997) underlined the competitive importance of securing a superior corporate learning capability. In company or government settings, for example, scenario planning helps to genuinely involve people with a wide range of relevant (or potentially relevant) knowledge, including planners, operational managers, functional and specialist experts, non-executive directors, trade union representatives, thinkers, and doers. External stakeholders can also be included, such as suppliers, distributors, and customers.
In scenario planning this learning is thus enabled through a combination of knowledge exchange (tacit becomes explicit) and new knowledge generation. Both redirect the learners’ attention to examine the broader setting (the “contextual” environment) in which the more immediate business environment (the “transactional” environment) and the learner are situated. This is depicted graphically in Figure 1.2.
The new learning manifests how the transactional environment might be reshaped from a combination of the impact of the contextual factors. Possible disruptions of the established rules of the game that characterize the competitive-collaborative interactions can then be mapped, that is, commonly understood practices governing the industry sector, policy domain, etc.
Similar links between scenario thinking and strategic planning and action were first articulated by our colleague Richard Normann (2001). Figure 1.3 is an extended version of Normann’s view of scenario-enabled strategic planning. The situation (where the strategist is located) is unfolding along the horizontal time axis. Knowledge and experience relevant to dealing with the situation are flowing into the present (here and now) from the past. As Kees van der Heijden puts it in the Foreword of this book, in the “predict and control” mode of planning which originated in more stable times, trends from the past were extrapolated and the forecasted future provided a more or less reliable point of reference to guide new decisions.
Figure 1.2. The contextual and transactional environments
1 In this figure the central scenario planning learner is assumed to be top management. If it is a division head, then other division management teams, and HQs, would be in the transactional environment; if it is a government ministry (e.g. natural resources), then other ministries (finance, etc.) would be in the transactional environment.
Figure 1.3. Reframing and reperceiving in scenario planning Adapted from Normann 2001, p. 225
Scenario planning adds a different space—with a breadth dimension reflected in the vertical “upframing,” which takes in the “bigger picture”—which is orthogonal to the time line in the figure. To access this new space, the strategists must broaden their perspective and look at the wider context of their immediate situation, at the same time as moving along the time dimension, that is, they must consider the future context(s). (Note also that in this new space the future is coming toward the here and now, as expectations, imaginations, and feelings such as hopes and fears, as indicated in Figure 1.3.) Normann considered that this upframed knowledge about the contextual environment operates at a higher-logic order and that it affords insights into connections among factors that are otherwise not envisioned by the strategists. Downframing then allows the scenario planners to immerse themselves in that possible future context to feel and work through existing and new courses of action, and to do so in detail with those who must work with the implications. With downframing, scenario learners rehearse the actions and reactions stakeholders might engage in under each plausible future context. These immersive experiences enable them to reperceive their situation, reassess the strategic options, and provide a new space for enabling design and experience of new and better options. This reframing-reperception cycle and how it supports learning in scenario planning processes are illustrated in Figure 1.4.
Premise #6—Reframing strategy is a distinctive capability that enables learners to identify new opportunities and more and better options.
An explicit and more flexible sense of future can enable a shift from a reactive to a pre-active stance which supports strategic innovation (more options can be considered, as well as how they might unfold). This can increase organizational adaptive capacities (having thought through an alternative plan makes it easier to shift if required). Teams and organizations can become better at engaging with unexpected, less familiar, and uncomfortable future developments, and by learning with futures can identify new opportunities and options to transform and create their future.
This is a distinctive capability for several reasons. Earlier we saw that the reframing-reperception cycles: enable the generation of new and shared knowledge; support tolerance for divergent thinking; and act to contain two “pathologies” that inhibit learning for people working in groups, namely, fragmentation and groupthink.
Figure 1.4. The interconnections between reframing and reperception
The effective learning among diverse participants is a key aspect of the scenario planning process. However, the process is about more than just knowledge sharing. It also involves rehearsing the new actions and the interactions that arise in each future context—i.e. in the newly created frames—and to do this through a process of immersive experiences which can deepen the understanding and implications about changing relationships and therefore new roles. These insights on new relations and new roles become unique strategic options in themselves.
Premise #7—Scenario planning can help develop new social capital to renew the license to operate.
By “license to operate,” we mean the roles and functions that society tacitly allows any organization to play, not any formal legal agreement. The tacit license to operate is more easily lost in TUNA conditions, and as such an organization’s existing license to operate cannot be taken for granted but can be redesigned and renewed or regenerated. The strategic conversation does not (or should not—or indeed often cannot) stop at the perimeter of the organization; it can support wider engagement that reaches out to encompass myriad external co-producers and stakeholders. Co-producers (Normann and Ramírez 1993) are those that play an active role in decision making and action; stakeholders are those potentially or actually affected by those decisions and actions.
The diffusion of power and authority in a more connected, socially complex, and multipolar world contributes considerable ambiguity. Disagreements within strategic decision-making groups on both means and ends are inevitable, and demands for direct participation in strategic decision making by such a diverse set of actors will arise. Strategic framing contests can become polarized between opposing ideological positions, or in the face of the contradictory certitudes held by individuals with different discipline-centered expertise. An inability to take in disagreeing frames can lead to back-handed power plays, whistle-blowing, community conflicts, and the demoralization of staff—particularly if there is no attempt to generate new shared understandings and in a manner that avoids unintentional “colonization of the future” by the existing status quo of power which is embodied by the “official future” of any organization.
Distinctive features of the OSPA
Having outlined the premises underlying the OSPA we suggest the three most distinctive characteristics of the practice that differentiate it from other scenario schools are:
A Purposeful Practice and Learner-Centric Scenario Planning Methodology
Our emphasis on purpose in the OSPA—in treating scenario planning as a purposeful practice—is crucial; it directs attention to the usefulness of scenario planning as a means rather than an end. The end has to be ascertained in advance. Examples include: is the learning obtained through scenario planning meant to inform what skills need to be secured for the future? Or is it instead going to help the learners to assess how robust existing options are? Or to seek the development of new options? Or to revisit the major risks faced? Or will scenario planning help to attract and keep interesting partners? This emphasis on purpose is based on pragmatic observations from our day-to-day practice in working with clients.9
Whether scenario planning is effective can ultimately be decided only by those whose role we call in this book the “scenario planning learner.” We define the learner as the individual or coherent group of people who have the power to launch or discontinue a scenario planning intervention, and for whose learning the scenario planning is designed. These roles may be held by different people, but in the OSPA all are learners. We discuss the role of the learner in scenario planning extensively in Chapter 4.
In our experience, too many scenario planning interventions are launched with inadequate definition of purpose (indeed, all too often also without identifying the intended learners). Insufficient attention to this is a major reason for frequent disappointment. In the OSPA we advise facilitators of scenario planning processes to be particularly attentive to the specification of the learner, and to the need to develop a definition of the scenario planning intervention’s purpose together with the learner in advance. The art involved here is to find the best possible balance between clear-cut purpose definitions on the one hand, and keeping the intervention sufficiently open for the learning process to take place.
Purpose is also essential inasmuch as the success or failure of the scenario planning process is defined in terms of how well it meets the purpose, and this depends on the learners’ judgment. It follows that a key success factor is to produce a clear-cut description of the purpose of the intervention, and put it on the table in advance as much as possible (see further discussion of these matters in Chapter 4), and to revisit and—if necessary—to “recontract” accordingly. The avoidance of clarifying multi-purpose intervention designs, if this implies a “fudge” or lack of clarity of purpose, is a good way to fail with scenario planning.
Empirical and independent analysis on how much of reported scenario planning work meets these criteria is rare. There is so far little agreement and considerable confusion in the literature on “what works.” Much of the published scenario planning accounts seems to focus on the importance of the so-called “focal” question which we discuss in Chapter 4 (and all too often a related 2 × 2 matrix) in a fairly mechanistic way, with little attention paid to the needs of the learners or how reframing will contribute to meeting their organizational goals. Many publications also assume that a set of scenarios are the “final product” of the scenario planning process, which are “delivered” to the “scenario users.” Issues of reframing and enabling learner reperception are frequently overlooked. In the OSPA, however, a final report or scenario book is not the purpose, nor the only product or most important outcome, of the scenario planning process.
The Relations Between Reframing and Reperception and the Iterative Process
The OSPA considers that a scenario planning intervention can work best iteratively, as opposed to being a one-off project, in successive rounds of reframing and reperception as depicted in Figure 1.5. Van der Heijden’s work on Indian agriculture (2008) is an example of first- and second-generation scenarios, articulating an iterative learning process over time. Shell International and the Singapore Government are also examples of organizations that practice scenario planning iteratively, as indeed Wärtsilä’s shipping division has done (see Appendix A).
Thus scenario planning as we see it in the OSPA is ideally not a linear “project” with a beginning, middle, and end, nor (ideally) a one-off intervention, but is instead an iterative process that enables and sustains organizational learning.
Taking this a step further, in the OSPA we see the relations between reframing and reperception as co-evolutionary. That is, they feed off each other, and as they do new knowledge is produced and learning evolves among those participating in the activity. This helps to forge shared understanding of the present and, in turn, enables more and better strategic options to be considered. The elements that make up the co-evolving learning that the cycles of reframing and reperception support are illustrated in Figure 1.4, where we have listed some of the key features involved in each component.
The reframing process provides contrasting alternative future contexts to enable a constructive exchange of perspectives. This typically happens in “strategic conversations” (van der Heijden 2005) which the scenario planners design and manage as places for disagreements to be aired safely, and made into an asset, as we explore in Chapters 2 and 3. This acceptance of difference and even disagreement supports the elicitation of tacit knowledge, the generation of new knowledge, helps to forge shared understanding of the present, and in turn enables more and better strategic options to be considered. Reperception results when a new course of action is identified.
Figure 1.5. Iterative learning cycles of reframing and reperception
The Limits of Positional Strategy: Collaboration for Evolutionary Advantage
As we will explain, evolutionary science is not predictive but does provide evidence that both competitive and collaborative strategies, as well as chance, have been key features of the co-evolution of living systems and their wider contexts. We will explain the value of scenario planning as a way to overcome this limitation by enabling strategists to consider new and better options, competitive and collaborative, by framing and reframing alternative future contexts to develop unique strategy. We build on the ideas of Emery and Trist, who also suggested that more collaboration among organizations sharing turbulent environments (whether in the same sector or across sectors) would help them to succeed under turbulent conditions.10 This has more recently been supported by research indicating that in a turbulent environment, enhanced competition at the level of the firm can undermine the resilience of the entire field (see Selsky et al. 200711).12 This is consistent with Prigogine’s view that to reduce turbulence it is advisable to reduce the number of relevant systemic interconnections.
We suggest that, over time, the institutional innovation produced from this field-level collaboration can either fail to reflect sufficient complexity (that is, lack requisite variety13 of information on system functions and actors) and/or become inflexible. The result can be a form of new endogenous crisis which also cascades to other co-dependent fields. This is arguably what happened in the 2008 financial crisis, when regulatory oversight failed to keep up with field-level collaborations of the increasing number of intermediaries in the system. The resulting “toxic assets” undermined trust of the whole financial system, and knock-on impacts cascaded to the real economy and ripped through the fabric of many societies.
In the same way, our own research, teaching, and professional intervention experiences support the idea that scenario planning offers a way of thinking and acting strategically that is more suited to TUNA conditions than conventional “predict and control” strategic methods. This applies both to leaders of single organizations and to sets of them acting in concert, especially established regulatory agencies and international institutions, as well as through cross-sectoral scenario planning initiatives that comprise temporary institutions. We explain this in detail in Chapters 2 and 3.
Methodological choices in the OSPA
Having set out the foundational premises underlying the OSPA and its distinctive characteristics, the methodological choices scenario learners face in following the Oxford Approach are perhaps easier to appreciate and understand.
First and foremost, we are convinced there is no single best or right method or set of techniques or tools comprising “the” method in scenario planning. Instead, it is advisable to understand and navigate methodological choices in designing an intervention that effectively supports the purposes and capabilities of the specific scenario learner.
In addition, the impact in scenario planning comes from completing the reframing-reperception cycle at least once. While new knowledge is generated in the construction of the scenarios, the actionability of that knowledge is only realized in the uptake of new options that have emerged from the scenario planning process. Scenario planning is always part of a wider intervention—it is a means to an end. As such scenarios are best thought of as services, not products, in raising the quality of the strategic conversation, or inventing and testing new options and actions, etc.
The impact and return on investment of a scenario planning intervention cannot be determined from the measurement of “better” decision outcomes. In TUNA conditions it is impossible to attempt to calculate all decision options and predict their outcomes in advance. Instead, the contribution of scenario planning learning processes needs to be assessed based on the explicit purposes of the intervention (were these met? how well?). The contribution often also involves a broader set of criteria, including the contribution it has made to improving the quality of the pre-decision interpretive framework and judgment process, its effects on shifting the strategic vocabulary used or on the clarification of strategic choices, the types of new questions brought forth, and the availability and prototyping of new options it has enabled.
We conclude this chapter by suggesting that it is incumbent on the scenario planning process facilitator (or “practitioner”) to also act as a learner as well as an enabler of learning. In doing so, s/he becomes able to clarify for others the guiding principles of their practices, as well as to use these to inform methodological choices in designing more effective scenario-based interventions.
Organization of this book
This book discusses scenario planning in general, and develops an in-depth overview of what has become known as the OSPA. The subject is treated in seven chapters, as follows:
Chapter 1 describes the crux of this book: how scenario planning enables individuals and groups in organizations and multi-organizational bodies in TUNA conditions to enhance their understanding of a particular situation in which they find themselves, and to develop new strategies. We outlined seven key premises underlying the OSPA, as well as its three most distinctive features. The first is its emphasis on enabling specific users to learn with scenario planning. The second concerns the tight relations between reframing and reperception in the scenario planning process. The third is its explicit focus on supporting and informing more flexible and balanced (competitive and collaborative) strategies in TUNA conditions.
In Chapter 2, scenario planning is assessed as an inherently social process. We show how it acts to either interrupt the continuous, backgrounded sense (particularly one’s sense of future) that underpins understanding of the present;14 or acts to help people make new sense when they experience or expect interruptions in their context.15 We explain that in the OSPA plausibility is co-produced by learners and supports their sensemaking. That is, when supported by scenario planning, co-produced plausibility involves social as well as conceptual iterations of reframing (sensemaking) and reperception (sense-giving). In Chapter 2 we also explore how scenario planning operates in situations where the future is one of the major playing fields where power is exercised.
Chapter 3 focuses on scenario planning as a designed and inherently cognitive process of inquiry. We explain how it helps people to mobilize existing knowledge and generate new knowledge by directing attention to the wider situation. It also helps people to develop ways to frame and reframe their understanding of what is happening now. This new co-produced and shared understanding, in turn, enables reperception in the form of new options for action to be identified and considered. We also outline three kinds of research that are pivotal for effective scenario planning work.
In Chapter 4 we focus on the purpose of the learner(s) as being pivotal in guiding the design of an intervention, and in choosing methods both for building reframing devices and for engaging different perspectives. We treat all those involved in and supported by scenario planning as “learners”—whether their role officially is that of client, user, strategist, policymaker, or facilitator. We explain that in the OSPA all are treated as co-learners, and that learning to reframe strategy is scenario planning’s core role. We review several “matters of technique,” including how to overcome attention and connection deficits in organizations undertaking scenario planning.
In Chapter 5, we explain the OSPA methodology in some detail. We propose heuristics and criteria that can act as “checklists” of factors to consider, which help scenario planners to select and deploy tools and techniques so they can work in harmony to contribute to the effectiveness of scenario planning in practice. We review eight aspects involved in designing a scenario planning intervention, beginning with defining purpose and use, and ending with evaluating the effort.
Chapter 6 provides insights for reflective practitioners about how scenario planning education can be designed to enable more effective practice. We focus on engaged scholarship, designing teaching/learning programs for individualized learning and for constructive feedback, and the role of errors and mistakes in learning scenario planning. We discuss the divides between practice and scholarship, and between scenario planning and other futures methods, and the potential role of scenario planning in bridging these divides.
In Chapter 7, we revisit the earlier chapters to recap the seven key premises and the differentiating characteristics of the OSPA. We then summarize its key ontological, epistemological, and methodological features. We highlight several issues that we see as unresolved in the field of scenario planning. We also propose two directions for further research in this field, namely, assessing the value of reframing and attention to case studies of failures.
In the Appendices we offer six illustrative case studies spanning corporate, public sector, and multi-stakeholder settings for scenario planning interventions. These six cases are referred to throughout the book. We also provide a Glossary to clarify some of the terms we use to explain the OSPA and its related concepts.