Overall, I like Erica Olsen’s Strategic Planning for Dummies, but I am not a fan of the scenario planning overview, which comes rather late in the book. Here are some thoughts for readers that they should consider when using Olsen’s text.
Strategic Planning for Dummies covers scenario planning in a very cursory way on pages 291-294. It provides a high-level overview, which as a practitioner, I find mischaracterizes the discipline, and therefore may lead readers down a less than meaningful path if they attempt scenario planning under the guidelines outlined in the book.
Here are some specific issues:
- Scenario planning is not a contingency planning effort, which is where it is located in the book. It may be used for contingency planning, but it is not its primary, nor by any means, only use. Scenario planning is most valuable in driving innovation, challenging assumptions, and creating a framework for strategic dialog (mentioned here, but only in passing). In other words, the topic belongs at the beginning of the book as a key entry point to creating good plans, not at the back of the book with contingencies and doomsday scenarios. Scenario planning is a technique used to create better plans, regardless of the strategic outcome an organization is aiming for, not just for negative cases.
- The book does not force the point on “outside-in” planning which is a core of scenario planning. Rather than just looking at variables that can be controlled by the organization, scenario planning looks at the forces acting on the firm over which it has no control and then explores strategic action within that bigger reality. Hinted at, but requires much more to do the topic justice.
- Scenario planning is set-up as an expensive and time-consuming effort. I will not argue that it is a minor investment, but it is also a highly valuable and leveraged investment. Given the right guidance, firms can conduct their own scenario planning, and therefore greatly reduce costs.
- The process is very very very simplified and offers little guidance. Scenarios essentially expose the messiness of the world and help firms navigate through that messiness in a more effective way. The chapter suggests that rather than confront the messiness, that scenarios simplify the future. That is not true. They create constructs for examining the variables of the future against a particular strategic question, but they do not simplify it, rather they create a spotlight on what is necessarily important to a firm, and offer a way to purposefully address the issues in the spotlight. Perhaps most importantly, they create a big spotlight, and multiple spotlights, so that firms don’t just look inconvenient places for future threats and opportunities.
- The chapter doesn’t touch on the core of scenarios, which is uncertainty. It lists some and talks about the big “unknowns” but it doesn’t discuss how they are discovered, the processes for vetting them nor the process for actually creating the scenarios from the uncertainties and driving forces.
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