In turbulent and uncertain conditions, using scenarios to reframe and re-perceive challenges can offer a better approach to strategy formation than evidence-based planning, risk-management, and projection, say the authors of a new book, Strategic Reframing: The Oxford Scenario Planning Approach (OUP), Rafael Ramirez and Angela Wilkinson.
‘In the past, leaders have often adopted a quasi-scientific approach to planning, using existing factual evidence and trends to forecast demand, competition, and governance requirements. This resolutely “rational” approach may have instilled a sense of confidence in their plans but it is totally unsuited to today’s complex, volatile, and ambiguous environment,’ said co-author Rafael Ramirez, Director of the Oxford Scenarios Programme and Senior Fellow in Strategy at Saïd Business School, University of Oxford.
‘The future is a playing field of power, which is already in the here and now. Leaders are increasingly being held to account for the stories they are telling their organisations and society at large about future prospects’, says co-author Dr Angela Wilkinson, the Strategic Foresight Counsellor at the Organisation for Economic Cooperation and Development (OECD) and an Associate Fellow at Saïd Business School, University of Oxford. ‘Scenario planning, done well, offers a way for people from all walks of life to work together to implement the imaginable rather than waiting to act until the next crisis can be predicted.’
Dr Ramirez argues that the scenarios planning process developed in and taught at Oxford can help strategic teams to avoid groupthink and blinkered vision, and to stop relying on what has worked in the past when making decisions for the future. ‘History is littered with examples of once-successful organisations that failed to imagine and anticipate game-changing events in time to adapt to the new environment,’ he said.
The Oxford approach is based on the principle that there are multiple futures and multiple strategic contexts. Rather than the usual predict-and-control approaches to strategy development, scenario planning is more accurately viewed as a creative and disciplined process of discovery. Strategists adopt the mentality of learners as they work in groups to develop and critique a number of ‘stories’ about plausible future contexts. This enables them to look with new eyes at their own interests and options in the present, as well as the interests and options of others.
‘We explain how this reframing and re-perception loop must be completed to get to an “aha” moment that helps people to become aware of the frame they and others have been using to make sense of and intervene in the world, as well as what is left out of this frame,’ said Dr Wilkinson. ‘Strategic reframing is a distinctive capability that enables leaders and their organisations to learn with futures that are already emerging in the present to identify new opportunities and design more and better options.’
The effectiveness of this reframing and re-perception, as well as challenges to its use, is demonstrated in a series of case studies published in Strategic Reframing: The Oxford Scenario Planning Approach, including:
Wärtsilä (Ship Power and Power Plants divisions)
Scenario planning work helped Wärtsilä’s senior managers to reframe their understanding of the contexts they were operating in. It broadened the issues they paid attention to, lengthened the time horizons they used when considering alternative possibilities, and helped them to reposition their company from its role as a leading equipment and services designer, manufacturer, and supplier to becoming involved as a strategic partner. The scenarios put the company on the map as a thought leader, and helped it become distinct in the minds of customers, suppliers, journalists, and industry analysts.
Scenarios have become part of Shell’s corporate DNA. Across the group, scenarios are developed focused on projects, countries, major investment decisions, and other strategic factors. Shell is able to adapt quickly or build new scenarios when facing emerging risks and crisis situations, such as on the invasion of Kuwait, on Iraq, and on the prospect of a global influenza pandemic triggered by a new flu virus.
AIDS in Africa
The AiA scenario initiative invoked the future as a means to establish common ground among the complexity of governments, policy experts and wider stakeholders involved in and affected by HIV/AIDS in Africa. Scenario planning opened up a safe space on a pressing issue for discussion about less comfortable ‘truths’ and helped to reveal deeply held assumptions that were preventing more effective solutions. It enabled deeper learning to clarify the complex reality and to help translate visions of an AIDS-free generation into actionable policies, providing a platform for mobilising collective action. As a result, organisations such as UNAIDS put a greater emphasis on long-term vision in responding to AIDS, and developed a growing sophistication in addressing the link between poverty, other forms of social inequity, and AIDS.
Strategic Reframing: The Oxford Scenario Planning Approach by Rafael Ramirez and Angela Wilkinson is published by Oxford University Press. Videos and case studies from the Oxford Scenarios Programme can be found in the Oxford Scenarios Programme Content Hub.
Source: Saïd Business School, University of Oxford
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