A Commentary on Forbes and Scenario Planning
Here is another article, this time from Forbes (Can LEGO Snap Together A Future In Asia?), that cast doubt on the effectiveness of scenario planning in make strategic and tactical decisions.
Scenario planning is just a tool, but it can provide great insight. As both a scenario planner and an analyst of knowledge management and collaboration systems, I see all too often the deference to the tool−that somehow the tool will do the managing where managers fail. If managers are failing, no tool will save them. If, however, managers are proactive, adaptive and strategic, they will find a way to turn the insights derived from tools, or leverage obtained from them, into meaningful strategic and tactical action. Understanding tools does not make a good manager, however, I believe managers who use the tools at their disposal effectively make good leaders.
The article outlines some key points about uncertainty. LEGO is doing the right thing by actively identifying and attempting to understand the range of ways uncertainty can play out. Given there is no data about the future, this approach to active forecasting and engagement gives organizations the best available insight about what could happen. Once leaders of organizations imagine what could happen, they are in a much better position to react, perhaps even anticipate, what will actually happen because they will be actively looking for events that point to one or more of their many futures. If they are really good at scenario planning, they will encourage and facilitate practicing the future so managers can prepare their intellectual muscles for situations they haven’t yet encountered.
The article also highlights comments from Mitzberg’s book Rise and Fall of Strategic Planning, including the comment that scenarios don’t work well because organizations can’t figure how to integrate them with the business. The way to integrate them is to make them an active part of strategic dialog, not just an exercise. Each time an organization makes a strategic decision, it should reflect on how that decision aligns with (or not) the scenarios and what that means for the organization and for the futures it imagines.