Am I imagining things or are all of our institutions getting surprised by conditions and behaviors? Leadership seems stunned and unable to respond to these seemingly surprise conditions. When leadership does respond, it’s completely reactionary and not well thought through. Well, we can change leaders and it should help some, but I think there is more to it than what meets the eye. Not only are problems larger than individuals, but for scores of collaborating teams supporting those leaders. It’s more than competing in a Global economy. It’s disasters, power shifts, unheard voices breaking through, it’s responding to changes in consumer attitudes, and it’s about keeping conflicting goals in balance to optimize as much as possible for all.
Why are these things surprising? Why are responses feeble? I think it is because there is little effective scenario planning and response optimization going on. The world, unfortunately, has been practicing war for as long as people been around and there are war scenarios with practiced responses. Why can we do the same for economic interactions and business management in all contexts? We have been practicing isolated and reactionary response to conditions as they occur and this will continue, but larger problems need a better solution. There is a grave need for lateral thinking to identify good bad and ugly scenarios and the ability to predict, simulate and optimize responses before “the matter hits the fan”
We have all these high paid leaders who can’t plan very well in the context of a world growing in complexity changing fairly fast. I think scenario planning is a skill that leaders had better learn instead of believing in their own past success and current corporate and power base mantras. These leaders have to have an attitude that does not punish lateral thinking when surfaced, but looks to see if the scenario response has been planned and in some cases practiced. These leaders need to communicate that they have completed these crucial plans. It’s a new year, let’s make a resolution to plan alternative outcomes and have core responses ready for reactive variation when needed.
11 responses so far ↓
1 Gagan Saxena // Jan 5, 2009 at 5:08 pm
Scenario Planning is being seen as an overhead since an unknown complexity is introduced as soon as we recognize that we live in a real world of dynamic, moving components that can interact with each other in unpredictable ways to create new scenarios.
This is where we need to abstract the complexity into simple models (like the famous, or infamous 2×2 matrices). We need to make empirical decisions quickly because the environment is changing at the same time. Decision models need to be simple and adequate – a criteria difficult to achieve, but still better than trying to stop the world while we analyze our way into paralysis.
Good management needs to manage complexity by instituting structure – enough to be affordable – and by developing abstracted, simple decision models – enough to be useful.
2 Jim Sinur // Jan 5, 2009 at 5:33 pm
There are a number of ana;ytical approaches to abstract complexity including simulation and other optimization forms. I like your approach as a front line approach with the addition of other back stops. Thanks
3 James Taylor // Jan 9, 2009 at 12:39 am
Interesting post Jim and I completely agree
Check out http://www.ebizq.net/blogs/decision_management/2009/01/scenario_testing_stress_testin.php for my POV
JT
4 Scenario Testing, Stress Testing and Decision Management » JT on EDM // Feb 12, 2009 at 4:38 pm
[...] management was one of my predictions for 2009 and Jim Sinur wrote a nice piece on this too – Scenario Planning is No Longer Optional. This entry was posted on Thursday, January 15th, 2009 at 2:25 pm and written by James Taylor. It [...]
5 Adam Gordon // Mar 19, 2009 at 3:44 pm
Totally agree. Problem in widespread scenario planning adoption has been poor quality, particularly in mixing up visionary (desired) scenario building and what-could-actually-happen scenario building. This is part of a bigger problem of mixing up future-anticipating and future-influencing methods in thinking ahead. More on this in “Future Savvy,” Amacom Press, 2009 http://tinyurl.com/5mdu2c http://www.futuresavvy.net
6 Processes Enable Early Warning for Emerging Business Scenarios // Mar 31, 2009 at 6:52 am
[...] scenarios that have well thought out responses that may leverage policy and rule changes (see http://blogs.gartner.com/jim_sinur/2009/01/02/scenario-planning-is-no-longer-optional/). Organization might have probes into market indices and watch the behaviors of customers, partners [...]
7 Paul McMenamin // Apr 27, 2009 at 12:10 pm
It all rings true in hindsight. is it that those who practice effective scenario planning do so making effective decisions and moving forward, but not publicizing the fact. And others have tried and been unsuccessful for any number of reasons abandon the practice and look for something else.
Are the current practitioners reluctant to make it known about their use, as they find it too advantageous? Are those who provide feeble responses plainly unaware of the possible benefit, or just don’t have the time. This looks like they can’t “sharpen the saw”.
8 chat sohbet // May 7, 2009 at 1:43 pm
Yeah, I have to comment on that too- what was with the wall?
9 Intelligent Decisions Go Beyond the Normal Ups and Downs // Jun 15, 2009 at 4:36 pm
[...] http://blogs.gartner.com/jim_sinur/2009/01/02/scenario-planning-is-no-longer-optional/ [...]
10 Why Isn’t Strategy a Bad Word in Down Times? // Jul 1, 2009 at 6:28 pm
[...] http://blogs.gartner.com/jim_sinur/2009/01/02/scenario-planning-is-no-longer-optional/ [...]
11 Peter Kennedy // Jul 15, 2009 at 9:10 pm
Those lucky firms that entered the economic recession in a relatively strong position may enjoy the freedom to now engage in long-term strategic planning a la scenarios. But for the majority of firms not as fortunate, the temptation is to “hunker down” in a nearly perfectly reactive mode, waiting for the market to turn up or for the fog to at least lift a little. I believe there is a valuable middle ground between the two extremes: Using 1-3 year mini-scenarios to evaluate risks, stress-test current plans, prioritize decisions and, yes, identify opportunities ahead of the competition. The idea is not to predict whether we’re headed to a U-shaped recovery or a L-shaped stagnation or any other variant…but rather to rigorously explore all plausible short- to medium-term outcomes for the economy and all meaningful sectors within it. Take all these plausible “futures” seriously. Think hard about how each scenario challenges (or reaffirms) your current plans and direction. Find common threads and elements and let them inform how you act. Most importantly, make this a senior leadership exercise, so everyone “gets it” and feels ownership over the result (that may make many feel uncomfortable, in a healthy kind of way).
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