Tailoring scenario planning to the company culture

Abstract

When an organization needs to use scenarios as a framework for logically discussing internal and external issues, it should be aware of the two predominant causes of failure of scenario projects: (1) a lack of agreement on the purpose of the effort; and (2) a lack of understanding about how scenarios might help different organizational cultures and styles. To avoid these pitfalls, leaders need to first assess the potential usefulness of scenarios using the culture of their organization and the goals of the effort as context. This article discusses three organizational cultures and illustrates how each uses scenario planning for three different purposes (directional strategy, contingency planning, and learning and team building). “Leader‐driven organizations”: if the purpose of scenario planning is for setting direction, then scenarios are used to structure debate; however, in the end, the leader decides the direction and everyone follows, leaving the debate behind. If the purpose of the scenario work is for contingency planning, then scenarios would primarily be used to sensitize the leadership group to possible changes; not decision making on a specific topic. When learning and team building, then the leader driven culture use scenarios to open up the idea space in search of the out‐of‐the‐box ideas. Ideally, leaders make scenarios a way for people to work new ideas into the planning and decision‐making system. “Plan‐driven cultures”: such companies value stability. If the scenario work is for setting direction, then the outcome will only be valued if the events leading to an endstate are treated as critical path lists. “Evidence‐driven cultures”: develop in highly capital‐intensive industries that have long time horizons. Because long‐term commitments cannot be changed quickly, real evidence is of paramount value to these cultures. Scenarios provide a framework of expectations to match up with the real world as it develops.

Citation

Mason, D. (2003), "Tailoring scenario planning to the company culture", Strategy & Leadership, Vol. 31 No. 2, pp. 25-28. https://doi.org/10.1108/10878570310464402