It is that time of year when everyone seems to polish their crystal globes and share predictions for the year to come. I am wary of such practices because we spend so much time with an eye on the horizon that we stop to reflect on the past and what we can learn to assist us in the present. Drop ‘digital’ – The workplace is constantly in a state of flux. We have been wrangling how to collaborate-in-place (whether it be physical or digital) for some time. Predictions are used to convey an understanding of the environment and a certain level of expertise. Unfortunately, it is difficult to suss out the true expertise amidst the plethora of predictions, and as a result, many companies take these predictions and try to force fit company / individual solutions rather than seeking out fit-for-purpose through scenario planning exercises (developed specifically for the company).
I am a fanatic about scenario planning…I better be considering it is one of the two business tools I have been researching for the past four years to support my dissertation. You do not need to be a futurist or contract a consulting agency to craft your own scenarios. All you need is some thinking time. I know – Easier said than done. I do not recommend devising or evaluating scenarios in 15-minute increments between meetings, but I have found December to be a fine time for this work because many companies have a freeze on technology or new spending/projects and essentially shut down the last two weeks of the year. No matter what time of the year you choose to embark upon your scenario planning challenge, ensure you set aside a good chunk of time to engage in this deep work.
What is scenario planning?
Similar to many of the catalysts igniting the digital age in the 1960s, world events also influenced the way business strategy was being discussed and designed. The academic practice of scenario planning began with Herman Kahn’s work assessing the possibility of nuclear war and economic uncertainties of a potential boom in the 1980s. Scenario planning came into the business mainstream in 1971 within the Royal Dutch/Shell Company under the vision of Pierre Wack and Edward Newland (Schwartz, 1991). It is this process of examining potential futures and structuring narratives to influence business leadership and decisions adopted by Shell and other business titans over the course of three decades that will be the focus of this study and ultimate creation of a final framework adapted for cultural institutions.
Futurist and president of Global Business Network, Peter Schwartz, captured the theory of scenario planning in bestselling publication, The Art of the Long View, in 1991. Schwartz learned scenario planning under the tutelage of Pierre Wack. Scenario planning was crystalized for the business community formally in 1985 as part of a pivotal two-part Harvard Business Review series, ‘The Gentle Art of Reperceiving’ and ‘Shooting the Rapids,’ penned by Pierre Wack. It is this initial article that began to make transparent the “special sauce” employed by Royal Dutch/Shell to escape financial and industry turmoil in the 1980s (Schwartz, 1991). Wack introduced scenario planning as a shift in managerial mindset from the traditional forecast planning. Scenarios are a set of hypotheses with three prerequisite conditions of relevance, coherence, and likelihood (Godet and Roubelat, 1996). Scenarios are developed from “outer space,” meaning they incorporate information external of the company, such as business cycle information, technology trends, demand and supply pricing, and more quantitative variables (Wack). This type of data crowds the pages of forecast planning, yet does not address the “inner space” or the mind and personal factors managers use to judge these scenarios for potential business strategy and outcomes (Wack).
Scenario planning bridges the inner and outer spaces to surface the unknown and challenge assumptions required to address and influence actions of decision makers. Wack emphasizes the required philosophy embracing scenario planning is understanding the power of responsibility and ripples of impact at all levels and various timelines. Wack states, “…power comes with an understanding of the forces behind the outcomes. Scenarios must help decision makers develop their own feel for the nature of the system, the forces at work within it, the uncertainties that underlie the alternative scenarios, and the concepts useful for interpreting key data (1985).” It is useful to understand what resources the organization has at any given time and the extent to which those capabilities may be affected. The maturity model serves as the business object to understand the current state, but the value is only reaped when this understanding is paired with the drivers, interdependencies, and trends of possible futures impacting the tasks and timeline an organization may or should take to optimize assets.
The elements of forecast planning are essential ingredients for a scenario to plant inside the mind of a manager. Wack calls this process “rooting” because a narrative without such predetermined data “would be effective and alive in the minds of managers as long as a tree without roots (1985).” The futurist maintains the image of the tree to further relate scenarios to cherry trees where the fruit is not born on the trunk or larger boughs, but the smaller branches (Wack). The fruit of labor that is the outcome of a scenario requires the extraordinary foundation of the tree trunk, the protection and resourcing of the boughs, and the focused and agile investment channeling through the smaller branches. The tree is part of an ecosystem fueled by specific nutrients derived from its environment, developing a unique signature or terroir. The scenario outcome or fruit is only as sweet and rich in flavor as all of the elements required for it to take life.
Academia is not short on models or frameworks devised to shed light on topics of interest or bearing on cultural institutions and when aligned with thinking inspired by Wack, “scenarios can effectively organize a variety of seemingly unrelated economic, technological, competitive, political, and societal information and translates it into a framework for judgment – in a way that no model could do (1985).” Just as a cherry tree could not take hold on the Arctic, scenarios are meant to represent different worlds with various outcomes that are consistent with the internal fundamental structure or life force of the cultural institution. Scenarios represent the many pathways to achieve that life force (Wack). There is no one right answer, but a small number of narratives exploring these pathways that when synced with capability status of a maturity grid, will prepare an organization to weather any circumstance and bear fruit for the next generation.
What areas should we be questioning?
Many organizations take steps to question and plan for the future. While these actions are commendable, some of the planning exercises may be causing more harm than good by advocating deterministic thinking and unintentionally supporting the assumptions of decision makers. Schwartz recommends asking the following open questions to begin mapping the gaps and opportunities of the organization: “What challenges could the world present me? How might others respond to my actions (1991, p.3)?” Scenario planning is not limited to thinking or planning about negative-based futures and may also be applied for organizations dreaming about greater opportunity and viability in the years to come. Scenarios are narratives constructed around various plot points of quantitative and qualitative data that paint a distinct worldview for that scenario (Schwartz, 1991, p.4).
Forecast planning may be the default for decision makers because fault can be traced back to the past quantitative data extrapolated for future consumption without context. It appears easier to take this route for action rather than the continuous barrage of questions and challenging of status quo driven by the scenario planning process. Blame can and is shifted down instead of accountability being at the top for action of success and failure. Schwartz does not side-step failure as a reality, but strengthens the argument for scenario planning as giving the manager a degree of confidence not viable in any other planning situation and being prepared for any outcome. Schwartz councils, “It is this ability to act with a knowledgeable sense of risk and reward that separates both the business executives and the wise individual from a bureaucrat or a gambler (1991, p.6).”
Change is difficult for a company of any size in any industry. True transformation occurs when actions and mindsets align towards mutual positive outcomes. Wack termed this behavior modification as “reperceiving” or to sync one’s reality with reality as it is perceived or may become in time (Wack). The end result is not to prescribe exact outlooks, but begin emotional and actionable tangible preparations for addressing any significant potential future. These early futurists pioneered the blend of art and science that would become the art of the long view Schwartz and the next generation of futurists would document and explore.
Consider using the digital workplace predictions drafted by Paul Miller of the Digital Workplace Group to begin crafting your own possible, plausible, and probable scenarios to aid in your decision making and investment processes. This is hard work. It is messy work. You may encounter the pressure to produce tangible, actionable, and agile results, but the process of benchmarking and scenario planning is the necessary and actionable work required for a solid digital ecosystem foundation and flow of information.
If you would like examples of well-crafted narratives, check out Trendswatch 2018 by the American Alliance of Museum’s Center for the Future of Museum, depicting four narratives set in the year 2040. … You don’t have to be a cultural institution to benefit from these examples. The narratives were drafted by CFM by crowdsourcing ideas from the museum community.
Share this challenge with your community by asking them to help think about what the world would be like for your company in five, ten or twenty years.
To get you started, let me share with you some of my favorite resources to help create scenario narratives: