Scenario-Driven Planning: Learning to Manage Strategic Uncertainty

Scenario-Driven Planning: Learning to Manage Strategic Uncertainty

Scenario-Driven Planning: Learning to Manage Strategic Uncertainty

Scenario-Driven Planning: Learning to Manage Strategic Uncertainty


Scenario-driven planning is a new management technology for strategy design that employs computed or "strategic" scenarios to improve the quality of managerial thinking. Strategic scenarios--the outcomes of modeling strategic situations--produce insight much richer than that expected from environmental scenarios alone. They bring to the consulting and upper-level management audiences a better way of handling strategic uncertainty, providing the tools managers and strategy students need for thinking and dialoguing about complex strategic issues.


In the last decade, Western economies have felt the pinch of foreign competition, particularly from the Pacific Rim nations. A recent Business Week article reports that Edith Cresson, the French prime minister, has been marshaling European countries into organized resistance. Political barriers to business may become one of Europe's answers to the Japanese onslaught. From a practical perspective, erecting political barriers to business and trade is much like taking arms against a sea of trouble. Trade barriers are not part of the United States' mercantile tradition.

US firms have made an implementation-oriented response to the Japanese challenge, shifting from the overcautious just in case approach to the exhilarating dare of just in time (JIT), rediscovering of statistical quality control (SQC), and placing a strong emphasis on total quality management (TQM). JIT, SQC and TQM stem from the wisdom and experience of Western Europe and the United States before World War II. While the West later abandoned these techniques, Japan both perpetuated their use and enhanced them.

Not only was the Western line of defense against foreign competition ineffective, but it was not even sustainable. Hard times require new organizational mind- sets. Confusion still reigns in the West about the perspective from which to approach long-term strategic thinking and strategy design. In stark contrast to the multidisciplinary approach to management originating from the European tradition, the US consulting tradition has been primarily monothematic. Consequently, most US firms are designed to function according to a single scenario, the one representing"the official corporate future" (Schoemaker, 1993, p. 199).

Our more prominent learned societies, such as the Academy of Management and the MS/OR group, operate in near-isolation. Quantitative management scientists have devised problem-solving methods which have met with success in the military and business spheres, but have not sat well with generalists. When asked, the Japanese insist that ours is not a worker but a management problem.

Firms around the globe use scenarios to enhance institutional learning, to . . .

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