Creativity and dysfunction in strategic processes: The case of scenario planning

This paper attempts to open up a new line of enquiry into the dysfunctions of creativity within strategic processes. Generally, the impact and results of introducing creativity (and innovation) into organisational life are perceived to be wholesome and beneficial. But recent research in the area of organisational psychology has documented a ‘dark’ side to its introduction, e.g., low employee morale, stress, theft, sabotage, destructive conflict. Learning from this work and shifting the domain to strategic management, this paper focuses on scenario planning—a strategy process widely regarded by participants and facilitators as creative and innovative in structure, content and output. First, the creative credentials of the process are established with reference to the literature and definitions from the creative and cultural industries. Second, the process is deconstructed into activities and each is examined for the extent of its embedded creativity. Third, informed by case evidence, four dysfunctions of the scenario planning process are conjectured: creativity layered on fantasy; heightened expectations and confusion; pride and passion; and creativity leading to excess. The paper concludes by suggesting four options for handling these potential dysfunctional effects and, in the light of the dialogue presented, re-interprets the definition of scenario planning presented earlier in the text.     

Connecting adaptation and strategy: The role of evolutionary theory in scenario planning

In this study, evolutionary theory is used to analyze and critique the strategic process of scenario planning. We argue that scenario planning can be strengthened as a theory- and practice-oriented process through the incorporation of evolutionary theory in the scenario narrative process, and in the subsequent implementation phases in response to environmental change. First, this paper addresses scenario planning in relation to theoretical perspectives on strategic planning and forecasting. Then, the concepts of variation, selection, retention, organizational learning and inertia are used to analyze scenario planning as a strategic process. This study argues that because scenario planning mirrors modes of variation and selection at the organizational level, evolutionary theory is a useful approach for assessing the plausibility of scenario narratives and strengthening the theoretical foundation of scenario planning as a process. By utilizing an evolutionary framework throughout the scenario planning process, this method has a better chance of encouraging exploratory strategic thinking without reinforcing non-blind variation or inertial practices. Concepts including inertia can also be used to better address bias and myopia in the scenario planning process. Additionally, evolutionary theory can be used to assess how entities learn from the outcomes of scenario planning as the environment changes over time.     

Scenario planning at business unit level

The scenario planning literature is focused on corporate level interventions. There is a general consensus on the method, but there is little debate about the stages involved in building and using the scenarios. This article presents a case study of a scenario planning intervention, which was conducted at a business unit of the British division of one of the largest beauty and cosmetic products multinationals. The method adopted in this case study has some fundamental differences to the existing models used at corporate level. This research is based on the principles of autoethnography, since its purpose is to present self-critical reflections, enhanced by reflective and reflexive conversations on a scenario planning method used at business unit level. The critical reflections concern a series of critical incidents which distinguish this method from existing intuitive logic scenario planning models which are used at corporate level planning. Ultimately this article contributes to the scenario planning method literature by providing insights into its practice at business unit level.     

Testing the rhetoric: An approach to assess scenario planning's role as a catalyst for urban policy integration

Policy integration has become a high-priority objective for urban planning and management. At the same time, the transportation and urban planning fields have increasingly employed scenario planning approaches, not only to develop long-term strategy, but also—potentially—to strengthen organizational networks and encourage collaborative action. Yet these latter supposed outcomes of scenario planning remain under-theorized and largely untested. In this study, we propose a methodology, based on established theories of collaboration, to test the ability of a particular type of scenario planning to encourage collaboration between participants. We demonstrate the approach using a scenario planning process undertaken within the transportation and urban planning community in Portugal. The pre-/post-test experimental design uses a survey designed to assess participants’ propensity for future collaboration by measuring change in individuals’ perceptions and understandings. The results suggest that the process likely modestly increased participants’ propensity to collaborate, primarily by strengthening inter-agency networks. The effects on participants’ views and understanding remain inconclusive. We suggest that specific challenges in applying this specific scenario planning approach to public sector contexts may limit the method's potential in achieving inter-organizational collaboration. Nonetheless, only more widespread efforts to formally test the scenario planning rhetoric will reveal the true impacts on organization change.     

The differential effect of environmental dimensionality,size, and structure on budget system characteristics in hotels

Whilst the service sector is a major component of world economies, research into, and thus our understanding of, how management control systems function in the service environment is limited. To advance our knowledge and understanding of the role of budgets in service organizations, this organizational level study extends prior manufacturing context research investigating the influence of contextual variables on budget system characteristics (BSC) to hotels. Since the nature of service firm operations is highly dependent on the external environment, perceived environmental uncertainty (PEU) is likely to be a key contextual variable. Consistent with the organizational theory literature, this study conceptualizes PEU more correctly as a multi-dimensional construct and seeks to ascertain the influence of components of PEU on the BSC of hotels, the chosen service industry. Based on a sample of 106 hotels and using path analyses, the results indicated that: (1) different dimensions of PEU have differential effects on BSC and organizational structure, (2) hotel size has a significant effect on BSC, (3) hotel size does not significantly influence structure, and (4) hotel organizational structure has significant influences on BSC. The finding for PEU raises implications for future researchers studying PEU.     

Strategic Choices,Environmental Uncertainty and SBU Performance: A Note on the Intervening Role of Management Accounting Systems

This paper examines the role of management accounting systems (MAS) design on the relationship between: (1) strategic business unit (SBU) strategy and SBU performance and (2) perceived environmental uncertainty (PEU) on SBU performance. MAS design was defined in terms of the extent to which managers use broad scope MAS information for managerial decision making. The responses of 62 SBU managers, drawn from a cross-section of manufacturing companies in Western Australia, to a questionnaire survey were analysed by using a path analysis. The results suggest that SBU strategy and PEU are important antecedents of MAS design, and that broad scope MAS information is an important antecedent of SBU performance.     

Perceptions of the relationship between scenario planning and firm performance: A qualitative study

This paper presents research findings from the application of scenario planning in multinational firms that operate in competitive industries. We use exclusive and not publicly available data to investigate the link between scenario planning and firm performance from a qualitative perspective. The focus was primarily on firms that had real-life experiences with this strategic tool. Our research suggests that scenario planning is interwoven in how strategy is formulated and that it has a major influence on decisions taken by management. We also found that none of the firms reported formal efforts of assessing the success rate of scenario planning. Participants report that this is due to difficulties in measuring qualitative and quantitative outcomes and because standardized assessment tools are not readily available for this kind of strategic intervention. Overall, participants generally regarded scenario planning as an effective intervention with a positive contribution to the firms’ performance. When pressed for more detail, participants revealed that scenario planning techniques were useful in exploring the business environment and future risks, isolating trends, understanding interdependent forces, and considering the implications of strategic decision-making.     

Can internally generated futures accelerate organizational learning?

After many years of scenario planning, this paper takes a moment to reflect on its use within, and value to, organizations. The author states that ultimately the benefit of scenario planning must result from ‘changed and more skilful action by the organization within its business environment.’ Navigating through the business environment is discussed as taking on two forms, that of strategising and learning where the former is dominated by ‘knowing by gaining control’ and the latter by ‘knowing by participation’ and reflection. Taking this logic a step further, van der Heijden sees the purpose of scenario planning as being categorisable along two dimensions content/process and thinking/action producing a matrix of four categories of purpose. Although he sees these four reasons for using scenario planning as harbouring different degrees of difficulty and likelihood of success, he advocates above all that organizations think carefully about which category is appropriate for them and ensure that the process of scenario planning is designed to support this goal.     

Managing group processes in transdisciplinary future studies: How to facilitate social learning and capacity building for self-organised action towards sustainable urban development?

Challenges for future urban development are complex and characterised by ambiguous problem definitions or unclear, conflicting and dynamically changing goals. Transdisciplinary research promises new ways of dealing with uncertainty and complexity by including non-academic actors into the research process and fostering social learning for better and more effective research. Depending on the level of participation and the number and heterogeneity of actors involved, appropriate designs for group processes but also associated skills are essential. In this article, we scrutinise the dynamics of groups to better understand how to effectively promote social learning and capacity building for selforganised action beyond project enc. Based on experiences of a participatory scenario planning process in the city of Korneuburg and substantiated with theories on groups and their development, we conclude with five propositions emphasising researchers’ responsibility in processes of societal change, the role of external facilitators, the scope and time needed for group building, the acknowledgement of various phases of group processes as well as requirements for social learning.     

A critical review of the application of environmental scenario exercises

Scenario exercises have become instrumental across multiple fields, from their original usage in business and military planning, to being ubiquitous in environmental planning and policy formation. This article critically reviews whether there are explicit and imminent divisions between how scenario exercises are used and discussed, with particular focus on the literature of qualitative scenarios concerning environmental challenges. The authors interrogate what scenario exercises are in actual practice, in the context of what they are used for and how they are designed, before then considering the criteria for determining ‘success’ for a scenario exercise. The particular focus of the literature analysed is in the emergence of the discipline of ‘environmental scenarios’, being scenarios concerned with 21st Century environmental challenges such as the influence of climate change on the notion of natural hazards.     

The critical role of history in scenario thinking: Augmenting causal analysis within the intuitive logics scenario development methodology

The historian Eric Hobsbawm stated that ‘The safest empirical generalization about history is still that nobody heeds its obvious lessons much’. Whether at a macroeconomic level or within individual organisations there are numerous examples of this, such as the economic crash of 2008, the causes of which had many parallels with those that caused the great depression 80 years previously. On the other hand however, overly-relying on the past as a guide to the future has its own obvious dangers—not least that important future events may have no past precedent. As such, the present paper firstly provides a discussion of the advantages and disadvantages of using the past as a guide to the future. It then examines the role of history in scenario work, arguing that history should receive greater emphasis as part of the scenario planning process. We suggest changes to the standard Intuitive Logics (IL) approach to scenario planning which would render learning from history a more central component of the scenario process, in contrast to its current peripheral role. Rather than diminishing scenario planning’s ability to facilitate a consideration of how the future may differ from the past, we show how a greater emphasis on history can enhance consideration of the causality of future change. An adapted IL that has more emphasis on historical analysis can augment scenario planning’s effectiveness as a tool for consideration of the future.     

Directions in scenario planning literature - A review of the past decades

This paper provides a systematized overview of patterns in the scenario planning literature published in the last decades. Recently, scenario planning has enjoyed a revival, apparent in the ‘boom’ in published research on the matter. Consequently, a major issue that needs to be addressed is how to organize the literature along precise lines. A number of reviews that describe the current status of the body of literature and knowledge on scenario planning have made attempts to respond to such requirements. These studies agree that systematizing the existing literature is a necessary step in developing the field. This paper aims to contribute to this purpose. The review of the academic literature here conducted is thought to be useful for both academics and practitioners. For researchers, this systematic overview will be constructive not only in providing an analysis of the directions of published research but also in setting up a research agenda for the future. For managers and practitioners, it provides a clear outline of firm-related articles and discusses their contribution from a managerial point of view. It also raises awareness with regard to future analytical methods, and in particular, to scenario planning and its potential contribution to the competitiveness of firms. The research was carried out under the research Project Enterprise of the Future of the University of Aveiro.     

Is your vision consistent?: A method for checking, based on scenario concepts

Common sense tells us that the future is an essential element in any strategy. In addition, there is a good deal of literature on scenario planning, which is an important tool in considering the future in terms of strategy. However, in many organizations there is serious resistance to the development of scenarios, and they are not broadly implemented by companies. But even organizations that do not rely heavily on the development of scenarios do, in fact, construct visions to guide their strategies. But it might be asked, what happens when this vision is not consistent with the future? To address this problem, the present article proposes a method for checking the content and consistency of an organization's vision of the future, no matter how it was conceived. The proposed method is grounded on theoretical concepts from the field of future studies, which are described in this article. This study was motivated by the search for developing new ways of improving and using scenario techniques as a method for making strategic decisions. The method was then tested on a company in the field of information technology in order to check its operational feasibility. The test showed that the proposed method is, in fact, operationally feasible and was capable of analyzing the vision of the company being studied, indicating both its shortcomings and points of inconsistency.     

Fear of foresight: Knowledge and ignorance in organizational foresight

We discuss the changes occurring in the field of organizational foresight. The analysis results from viewing foresight from two different perspectives: as centered on the future or on the present; as macroscopic analysis or microscopic practice. The combination of these factors results in four different modes of organizational foresight: strategic planning, visioning, scenario thinking and planned emergence. These different perspectives are examined. We contribute to the literature by presenting foresight as a complex process, amenable to different understandings. Foresight is often portrayed as a technical and analytic process. We discuss it as a human process permeated by a dialectic between the need to know and the fear of knowing.     

Scenarios to challenge strategic paradigms: Lessons from 2025

As a process looking for alternative visions of environment and corporate futures, scenario planning challenges strategic paradigms. In that way, scenario planning is dealing with the different beliefs of the many actors who make the organization and its global and business environments. Among these beliefs, emerging ideologies are one of the main shaping factors for the construction of new visions of corporate environment and corporate futures. To analyse the interaction between scenario planning and emerging ideologies, this paper will first propose a conceptual framework based on the dynamics of strategic paradigms. Second, it will discuss Electricité de France 2025 scenarios longitudinal case study in the context of the diffusion process of the French so called prospective approach to show interests and traps of scenario planning to manage paradigm shifts.     

Unravelling the complexity of collective mental models: A method for developing and analysing scenarios in multi-organisational contexts

In multi-organisational contexts, scenario building has been used to engage stakeholders in a critical discussion on issues of mutual importance, and to gain their support with regards to possible future responses. A review of existing literature suggests that much has been written regarding the process of scenario development and the benefits of the process, but the detailed analysis of scenario building outcomes, which encompass a large number of issues and their complex interconnections, has not been made explicit for studying and enhancing understanding of a complex societal problem. This paper presents a systematic method for analysing such complex outcomes in order to facilitate reflective thinking on important issues within the wider context for policy development. The method was employed in a series of participative scenario development workshops, which yielded several causal maps around the theme of construction industry skills. A collective map merging the individual subject-specific causal maps was created to help provide a more holistic overview of the pertinent issues surrounding the construction skills debate. The analysis of this collective map promotes a better understanding of the issue in the wider context, the consequence of possible future events and actions, and of the pre-requisition required for certain events/desired outcomes to take place. The main benefit that could be derived from the method is the opportunity to help facilitate and encourage debate and discussion amongst key stakeholders regarding scenario theme, in this case skills improvement within construction. Due to its flexibility and adaptability, the method could potentially be applied to other areas requiring longer range planning and which contain multiple stakeholder perspectives.     

To boldly go where no man has gone before: integrating cognitive and physical features in scenario studies

A recent surge in the literature shows that scenario studies are very much back in vogue. The revival of the scenario approach to strategic planning, however, also shows that the method has developed rather one-sidedly both in theory and practice. The dominant trend in scenario thinking is that scenario construction is used primarily as a cognitive exercise, involving mental processes only. In this paper we aim to complement this development by arguing for a more integrated approach, involving both cognitive and “physical” features. Such an approach combines more traditional cognitive elements of scenario studies with, for example, organizational experiments, deliberately made small mistakes, and external corporate ventures. Moreover, we introduce a typology of scenario studies based on two salient assumptions that characterize the field.     

Marketers expressing the future: Scenario planning for marketing action

Thomas Friedman exhorts us to imagine the future [1] - we urge marketers to invent the future, to learn the future faster, and to deliver the future earlier. Marketers are asked to develop scenarios about emerging technologies such as broadband wireless but more often than not have no education or training in scenario planning. Also marketers are often stuck in a strategic planning mindset based on successful replication of past marketing strategies. Strategic management and marketing learning has ventured into futures and foresight methodologies, but with strong focus on conventional macroscopic high-level scenario planning methods.This paper positions scenario planning as a method to express the future vision, both tacit and explicit, of business, products and services in a clear succinct story form, to underpin all elements of a marketing strategy (goals, position and execution). The scenario planning for marketing action (SPMA) model is introduced and discussed incorporating eight principles: moderation and time compression; storytelling led new product and service development; customer orientation; iterative dynamic scenarios; complexity science to foster non-linear thinking; risk weighted scenarios; participant hosted scenario workshops; springboard consolidation.The SPMA method was proven and evolved within postgraduate Executive education courses in Sydney and Bangkok from 2003 to 2007. This approach is fundamental for marketers to gain competences in “learning the future faster”, thus possessing capabilities to imagine and invent the future and deliver the future earlier.     

Scenario planning interventions in organizations: An analysis of the causes of success and failure

This paper presents a case analysis of a successful scenario intervention in an organization. This intervention is compared and contrasted with an unsuccessful one reported in Hodgkinson and Wright [Confronting strategic inertia in a top management team: learning from failure, Organization Studies 23 (2002)949-977]. We demonstrate that analysis of the answers given by workshop participants in a pre-intervention interview can be helpful in determining the receptiveness of an organization to a subsequent scenario intervention. We theorize that strategic inertia-characterized by coping patterns of bolstering failing strategy, procrastination (over a strategic dilemma) and buck-passing (the responsibility for the dilemma's resolution), can be caused by the psychological attenuation of the perceived level of environmental threat to the organization, culminating in unconflicted adherence to the currently followed strategy. We contend that the expression of such coping behaviour is antithetical to a subsequent successful scenario exercise since, if the exercise fails to identify an unconflicted strategic alternative, the sharp focus of the scenarios on futures unfavourable to business-as-usual strategy will re-activate the cognitive stress-reduction mechanisms. Strategic inertia will thus be reinforced. We conclude with a review of the implications of our diagnosis for reflective practitioners.Our paper is divided into four sections. In Section 1, we overview writings on inertia in strategic decision making. We pay especial attention to identifying potential causes of inertia. Next, we present Janis and Mann's [Decision Making, Free Press, New York, 1979] views of the psychological processes invoked by conflicted decisions and analyse the relevance of this laboratory-based theory to provide a psychological explanation of strategic inertia. Finally, we briefly describe the scenario intervention process and argue that it contains the potential to overcome strategic inertia. In Section 2, we review an already-published study of an unsuccessful scenario planning intervention, which illustrates the operation of components of Janis and Mann's model. Next, in Section 3, we focus on our own case investigation of a successful scenario planning intervention. The early part of this section documents the “success”, whilst the latter part analyses the causes of the success—again using the components of Janis and Mann's model. We conclude in Section 4, where we compare and contrast the application of Janis and Mann's model to both cases and we demonstrate that application of the model to pre-intervention interview data can aid the practitioner determine, at the outset, whether or not the organizational context will be receptive to the intervention.