Scenario Planning for Disruptive Technologies

Chapter 10 discusses the importance of scenario planning for emerging technologies. This chapter also discusses the steps necessary to develop scenario planning for emerging technologies and how Knight-Ridder, a newspaper publishing company, developed scenario planning to meet the challenges of complex and uncertain emerging technology. Scenario planning uses variety of information, which influences a situation, in a systematic way to make better decisions. Scenario planning helps firms explore possible futures of a new technology. Scenario planning is different from other planning techniques in that it takes into account three challenges firms face - uncertainty, complexity and paradigm shift.

Constructing scenarios

Scenario planning involves 10 basic steps.

1. Defining the issues: First step in scenario planning is defining issues that need to be understood in broader scope.
2. Identifying the major stakeholders: Identifying the internal and external stakeholders and their roles, interests and position in the organization.
3. Identifying the forces that influence future: In this step, firms, with the help of internal and external sources, should identify and gather information about the important forces that cover social, technological, economic, environmental and political domains.
4. Identifying tends or predetermined elements: With the help of surveys or workshops or diagrams, firms should identify elements that affect the important forces identified in step
5. Identifying key uncertainties: By conducting surveys or taking the views of senior officials, firms need to identify key uncertainties in the main forces.
6. Two important key uncertainties: In this step, in the list of key uncertainties, two most important uncertainties has to be selected.
7. Assessing the consistencies and plausibility of initial scenarios: In this step, internal consistencies can be tested by finding answers to the following questions:
   Are the main future trends all mutually consistent with each other?
   Can the outcomes postulated for the various key uncertainties all co-exist?
   Are the presumed actions of stakeholders compatible with their interests?
8. Assessing the revised scenarios: Finding the behavior of stakeholders in the revised scenarios through role-playing or consulting outsiders. This brings deeper strategic insight to the organizations.
9. Further assessment to analyze complex interactions: In this step, organizations should develop a each scenario’s logic through influence diagram and system dynamic modeling. The purpose behind this is to imagine the mental maps of managers’.
10. Reassessing the key uncertainties: In this step, it is important to know how each uncertainties influence different scenarios and to find if any changes are needed.

Traps to Avoid

Authors also discuss scenario planning pitfalls or traps to avoid. There are many traps that has to be taken care of when developing scenario planning. As scenario planning helps to make decisions for the uncertain technologies, it is difficult to find traps. Some of the potential pitfalls are:

• Failing to gain support from top management early on.
• Lack of diverse inputs Failure to stimulate new strategic options
• Not tracking scenarios via signposts

Benefits of Scenario planning for emerging technologies

• It is a good tool to analyze the possible multiple futures of emerging technologies.
• Helps to examine the interaction between the technology and the market that shapes emerging technologies.
• Helps to visually analyze the impact of technology on the business model.
• Enhances budgeting and resource allocation.
• Allows organization to understand in which technologies it should invest to gain competitive advantage.

The chapter concludes by saying that scenario planning as creating surrogate crisis. Imagination of crisis provides firms to analyze the potential challenges of emerging technologies. Though companies might face resistance to new ideas, authors suggest that scenario planning could be considered as a learning opportunity. Scenario planning provides a framework to deal with uncertain situations. Scenario planning would be a powerful tool for firms and managers to analyze ambiguous situations that surrounds emerging technologies.

Reasearch

World Economic Forum (WEF)

Apart from providing their partners to enhance their strategic decision making, scenario planning at WEF helps to develop a common language among different stakeholders who has diverse and conflicting worldviews, thereby providing a shared vision and creating a desirable situation for the future participants.

At WEF, scenarios are developed by gathering information from different sources such as businesses, society, government and academic groups. Information for scenarios is gathered through discussions, conducting open-ended interviews and conducting workshops. Scenario building is a joint effort of those who took part in the developing the scenarios and also the views and assumptions of individuals or interest groups. With scenarios WEF could integrate different views of the stakeholders and also provides neutral space for the multi-stakeholder dialogue.

Reference:

http://www.weforum.org/en/initiatives/Scenarios/index.htm