Academic journal article Journal of Leadership & Organizational Studies

A Methodology for Assessing Performance-Based Scenario Planning

Academic journal article Journal of Leadership & Organizational Studies

A Methodology for Assessing Performance-Based Scenario Planning

Article excerpt

Scenario planning is an expensive organizational intervention and experts have often justified their high salaries based on the assertion that expertise in conducting the process is rare. As the popularity of scenario planning has increased, so has the number of consultants and farms claiming expertise in facilitating the process, thus making scenario planning more available to organizations than ever before. This unique situation poses a challenge as scenario planning becomes more frequently applied in more diverse settings. As the process of scenario planning itself becomes more mature, conversations among its practitioners are beginning to center around the intended outcomes of their interventions.

Some have asserted that scenario planning produces results in several conceptual domains including that of financial performance (Wack, 1985a; van der Heijden, 1997; Schwartz, 1991; Ringland, 1998, 2002; Georgantzas & Acar, 1995). Evidence of such results are rarely examined or reported (Pearce, Freeman & Robinson, 1987). While some authors have argued that scenario planning should appropriately result in improved participant learning (de Geus, 1988; Shoemaker, 1995; Godet, 2001), the argument presented here positions performance as the primary output with learning as a key driver of that outcome. Key authors in scenario planning have, in fact emphasized the learning component with titles such as Learning From the Future, (Fahey & Randall, 1998), Accelerating Organizational Learning with Scenarios, (van der Heijden, Bradfield, Burt, Cairns & Wright, 2002), and De Geuss' (1988) adage that learning capacities may be the ultimate competitive advantage. While learning may be a required and critical component of scenario planning, the views advocated in much of the scenario planning literature imply that performance improvement is an outcome of the learning process. The core argument of this paper is that explicit performance improvement at several levels should properly drive the scenario planning process and opportunities for performance improvement are identified by a performance need (Deming, 1982).

Scenarios are being increasingly applied in differing settings by varying groups of people from diverse backgrounds (Fahey & Randall, 1998). To date, scenario planning has found its home primarily in practice, although some academic programs are beginning to offer content pertaining to scenarios in discussions of strategy. Examples and studies of scenario planning have centered on case studies (Ringland, 1998; 2002), and very few projects reflecting scholarly research or theoretical examination have been produced. Authors in the field of Human Resource Development (HRD) have contributed some insight around learning in scenarios (Chermack & van der Merwe, in press), scenarios coupled with strategic planning (Swanson, Lynham, Ruona & Provo, 1998), an integrated definition and outcome variables (Chermack & Lynham, 2002) and the challenge for applying evaluation and theory building methods to the process (Chermack, 2002; Chermack, Lynham & Ruona, 2001).

Structure and Theoretical Framework

The purposes of this paper are: 1) to provide a rationale supporting performance improvement as the primary outcome of scenario planning 2) to posit performance improvement theory as a core theoretical foundation of the scenario planning process, and 3) to provide heuristic for evaluating the performance of the proposed scenario planning outcomes. The strategy for accomplishing these purposes will be to first provide an overview of the three levels of performance improvement, and second, the theoretical foundations of performance. Once this frame is established, a discussion of scenario planning, its definitions and current intended outcomes will be presented. It will the be argued that effective scenario planning not only addresses these three levels of performance, but additionally incorporates the theoretical foundations of performance improvement. …

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