Strategic Thinking and Use of Scenarios
Our mental models or paradigms shape how we perceive and how we act. We often unwittingly interpret the world based on an unconscious set of assumptions that may not be accurate or may not be the whole picture. If we create and implement plans on this basis we are in for a rude awakening. What's more, the future is not predictable, yet we must act.
We can address this challenge in part by engaging in Strategic Thinking. One purpose of Strategic Thinking is to move away from predicting outcomes and move toward a better understanding of the forces that compel an outcome. In Strategic Thinking the focus is not only on what will happen, but on what we will do if it happens. This then leads us to what we would need to do now, and going forward, so that the organization is optimally poised to take the appropriate action.
We can approach this task of preparing the organization to cope with change in part by using scenario generation. In generating scenarios, we take what we know, surmise, or can speculate about the current and postulated trends and develop "what if " stories of possible futures that the company could find itself in. Then we consider how our business strategy would fare in each of the scenarios we have generated. It is key to generate some scenarios thinking outside the box of "current wisdom" or knowledge or else we miss the point of the whole exercise.
Once we have generated several scenarios and considered the challenges generated by each, we consider the impact on our strategic options. We can then see that:
- some actions will be required regardless of which scenario comes to
pass,
- some need to be taken so that the company is positioned to deal with
likely changes,
- some can be taken that are more important for some scenarios than others, but do not create harm in any scenario.
This gives us a lot of legitimate strategic options to consider before we even venture into the territory of options that are good if one scenario comes to pass, but bad if another one does.
Scenario generation and analysis provides a good balance of external focus when coupled with the more internal focus of other aspects of Strategic Thinking.
Kane & Associates provides assistance in
Scenario Generation and Analysis.
For more information please click here
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