Academic Reflection paper

Introduction

What is Scenario Thinking Scenario thinking is a flexible and nuanced tool, and its applications are far-ranging. It is a tool for motivating people to challenge the status quo, or get better at doing so, by asking “What if?” Asking “What if?” in a disciplined way allows you to rehearse the possibilities of tomorrow, and then to take action today empowered by those provocations and insights. What if we are about to experience a revolutionary change that will bring new challenges for businesses or even human kind? Or enter a risk-averse world of few gains, yet few losses? What if we experience a renaissance of social innovation? And, importantly, what if the future brings new and unforeseen opportunities or challenges for your organization? Will you be ready to act? [1]

Advantages

As stated before scenario thinking is a flexible and nuanced tool, and its applications are far-ranging. It provides means to (among other things):
• make tough decisions
• foster a shift in strategy (informed by the changing circumstances)
• empower your organization to take courageous action, encouraged by a long-term perspective
• wake up your organization to the challenges it is facing by exploring together the downsides to continuing the status quo
• align and inspire diverse stakeholders by finding and exploring common ground for the future.

Another strong advantage of scenario thinking is its applicability.
• It is a powerful tool for organizations of any size and scope
• It can be used to address the complex challenges of large global organizations, as well as those of smaller community-based groups
• Scenario thinking is particularly well suited for nonprofits
• that do work that is highly dependent on multiple actors inside and outside the sector; address interdependent and complex issues; have a clear interest in external trends; and feel a responsibility to address diverse points of view
• Nonprofits that manage complex stakeholder relationships and that must develop strategies reflective of diverse needs are also good candidates for scenario thinking

Summarized, scenario thinking has the following strenghts:
• Firstly, it is again important to note that ‘foresight’ concepts differ from ‘forecasting’. In the past, attempts were often made to predict (forecast) the future as accurately as possible. However, different developments in related fields should leave open several possible developments (see Fink et al., 2000). The strength of scenarios is that they do not describe just one future, but that several realisable or desirable futures are placed side by side (multiple futures).
• Secondly, scenarios open up the mind to hitherto unimaginable possibilities and challenge long-held internal beliefs of an organisation; moreover, the use of scenarios can change the corporate culture, compelling its managers to rethink radically the hypotheses on which they have grounded their strategy.
• Thirdly, scenarios are an appropriate way to recognise ‘weak signals’, technological discontinuities or disruptive events and include them into long-range planning; as a consequence, the organisation is better prepared to handle new situations as they arise and to promote proactive leadership initiatives.
• Fourthly, one function of scenarios beyond the planning aspect is improving communication: scenarios can lead to the creation of a common language for dealing with strategic issues by opening a strategic conversation within an organisation; this aspect is emphasised especially by van der Heijden (1996).
• Fifthly, another function beyond the planning aspect is the coordinating function: during the scenario process the aims, opportunities, risks, and strategies are shared between the participants which supports the coordination and implementation of actions. In fact, the organisational learning and the decision making process is improved.
• Sixthly, the large number of different scenario techniques points out that the ways of building a scenario are very flexible and can be adjusted to the specific task/ situation.[2]

Disadvantages

In contrast to these mentioned strengths/advantages, scenario thinking techniques have several weaknesses:
• The practice of scenario is very time-consuming. Therefore, there could be a wish to condense scenario building to a half-day or one day activity. However, this may not give participants enough time.
• A more qualitative approach has to put a strong emphasis on the selection of suitable participants/ experts, and in practice this could not be an easy task to fulfil.
• Further, it should not be overlooked that a deep understanding and knowledge of the field under investigation is absolutely necessary. Data and information from different sources have to be collected and interpreted which makes scenario building even more time-consuming.
• It could be difficult not to focus on black and white scenarios or the most likely scenario (wishful thinking) during the scenario-building process.[2]

Conclusion

Considering the above...Scenario thinking is growing in use—and its use will continue to grow—because it is one of the few proven tools for developing our capacity to understand and manage uncertainty. It is a powerful tool that tests the mind, challenges belief, stretches the spirit, and at its best creates new sources of hope. People who take naturally to scenario thinking are lifelong learners; they believe that the world is continually changing and are forever seeking insight from new places, making new connections, and innovating new solutions. If the next generation of nonprofit leaders routinely uses scenario thinking, the cumulative effects for the sector as a whole will be significant. Civil society organizations must find new ways to create urgency and collective will for addressing large interdependent problems, both old and new. Scenario thinking will not be the only tool for making progress, but it could well become among the most important. In contrast, there is only a small number of studies which analyse the relationship between scenario planning and firm performance or try to evaluate the accuracy of the outcomes of a scenario. Regarding further research on scenario techniques, firstly, there is clearly a gap to be closed. A starting point for an assessment could be to distinguish between content and process and to develop on that basis a method for evaluation. Secondly, scenario building is often considered as primarily a tool for large multinational corporations. To develop a suitable scenario approach for small and medium-sized enterprises on a scientific ground could also be a favourable task for research in this field. Thirdly, scenario techniques may be improved a lot if they are combined with other future methods (like e.g. roadmapping, Delphi, creativity techniques) and a concise mix of methods could also be evaluated.[2]

References

[1]Global Business Network. http://www.gbn.com/ArticleDisplayServlet.srv?aid=32655
[2]Under Science. http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec_id=6516