Evolution of Scenario Planning: Theory and Practice from Disorder to Order 9783110792065, 9783110792041

Table of contents :
Preface
Contents
Chapter 1 Change, Failure, Success, and Foresight
Chapter 2 Genealogy and Evolution of Scenario Planning
Chapter 3 Business Idea and the Basis of Organising
Chapter 4 Strategic conversations, scenario process, and reframing business idea
Chapter 5 Coping with Surprises and Potential Disruptions: Towards an Understanding of the Role of Negative Capability
Chapter 6 Reflections in the Twilight
Chapter 7 Conclusion – How to Employ the Scenario Process
Index

Citation preview

George Burt Evolution of Scenario Planning

George Burt

Evolution of Scenario Planning Theory and Practice from Disorder to Order

ISBN 978-3-11-079204-1 e-ISBN (PDF) 978-3-11-079206-5 e-ISBN (EPUB) 978-3-11-079211-9 Library of Congress Control Number: 2023942759 Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.dnb.de. © 2023 Walter de Gruyter GmbH, Berlin/Boston Cover image: DNY59/iStock/Getty Images Plus Typesetting: Integra Software Services Pvt. Ltd. Printing and Binding: CPI books GmbH, Leck www.degruyter.com

To the memory of Kees van der Heijden (1933–2023) To my wife Jane and son Cameron for their love, support, and patience over many many years.

Preface I started my career initially as Chartered Accountant, working in Scotland, West Africa and London. Little did I know how these experiences would help me with my academic career. I subsequently returned to academic life as a student where I was incredibly fortunate to meet and work with Kees van der Heijden, who after retiring from Shell, had been appointed a Professor of Strategy at Strathclyde Business School. The next 12 years working with Kees would transform my life, as well as my academic career. Kees was keen to understand if, and how, the scenario approach would work in a different environment from Shell. We received funding from Scottish Enterprise to conduct research on the impact of scenario planning with three Scottish small/medium sized enterprises (SMEs). Building on this research we received funding (from Thus plc) to determine if scenario planning could help local councils cope with the advent of EGovernment. We published a wide range of research papers from these incredible sites, which have enhanced many aspects of our understanding of the role and impact of the scenario process. Throughout these 12 years Kees demonstrated his willingness to engage with a scenario novice (me) as well as engaging with many other academics and practitioners. Kees had endless patience and thought that no conversation about scenarios was pointless. His book ‘Scenarios, the art of strategic conversation’ was ground-breaking and has provided many opportunities for me to explore and broaden our understanding of strategic conversations within a wide range of organisations: global, local, small, and medium and various public sector organisations. Without his guidance this book might not have happened. I hope that Kees would enjoy reading the book and the advances that it makes for strategic conversations with scenarios. We formed the Centre for Scenario Planning and Future Studies as Strathclyde Business School, embedding the scenario process in teaching, executive education as well as undertaking many more research projects. During my time at Strathclyde Business School, I had the opportunity to work with a wide number of academics, with diverse backgrounds and research interests, who helped challenge and stretch my understanding and thinking about the scenario process and its impact on individual managers and their organisation. These academics include Fran Ackermann, Robert Chia, Colin Eden, Chris Huxham, Gerry Johnson, Peter McKiernan, John Sillince, Hari Tsoukas, and my two great friends and collaborators David J. Mackay and Anup K. Nair. And subsequently at Stirling Management School Sharon Bolton and Kepa Mendibil. Outside of these two universities I have been fortunate to meet and have many enriching conversations with Mike Zundel, Robin Holt, Rafael Ramirez, Donald Michael, V. K. Narayanan, Ted Fuller, Anthony Hodgson, and more recently Mie Augier. I would also like to thank every academic that engaged with me at the many academic conferences over my 30-year career, there were many fruitful conversations. Apologies to all those wonderful people that have also engaged with me that I https://doi.org/10.1515/9783110792065-202

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have not mentioned, as well as the thousands of students that I have had the privilege to teach. I would also like to thank the many management teams who provided opportunities to work with them, especially where they had no prior experience of strategic conversations with scenarios. My understanding of the role of the scenario process has evolved over 30 years, which is reflected in the title of the book, especially the sub-title ‘Disorder to Order’. The scenario planning field covers a wide range of schools of thought; however, my thinking and understanding has evolved to reflect the process school of thought which is based around a constantly changing world. Thus, the emphasis of strategic conversations with scenarios where narratives, discussions and dialogue are central to making sense of the changing world and understanding ‘organisation’ and ‘organising’. This is in contrast with the widely recognised analytic/planning school of thought. I have attempted to differentiate these schools of thought in chapters two and three. The scenario academic field needs to be much more explicit around the school of thought that research is grounded, otherwise academics will add to the confusion and practitioners will become more perplexed about their engagement with the scenario process. The other aspect of the sub-title ‘Disorder to Order’ reflects my experience of working with and researching a wide range of management teams in many varied settings. Although many management teams will have worked together extensively over a long period of time, one aspect that never ceases to amaze me is their belief that they all understand the characteristics of their organisation in the same manner. Yet, during interview feedback workshops I have lost count of the number of times that I have heard one or more managers’ state: “I cannot believe that someone thinks ‘that’ about our organisation”. The scenario process provides the time and space for these views to be aired, shared, and be debated. Doing so helps to build consensus and agreement between the management team for a moment in time. There are many complex aspects to strategic conversation with scenarios. I have tried to set out and discuss a few in chapters five and six. I am acutely aware that some academics think that scenario planning is nothing more than ‘snake oil’. An approach with no theoretical grounding or evidence that it makes a difference in practice. Chapter four highlights the impact that the scenario process has had on the case study organisations, helping the management teams understand their changing world and be able to act on the insights they created from their conversations in a foresightful manner. The evidence and impact is theoretically grounded in the work of Watzlawick, Weakland and Fisch (1974) who provide a coherent understanding and explanation of second-order change, where the basis of organising is reframed. Subsequent understanding and action emerge from possibilities which had previously not been considered. Boundary thinking is dissolved, and the ‘propensity of the moment’ is apprehended and enacted. Chapters five and six begin to reveal the latent talents within individual managers that may not be utilised in their everyday work and operations. These latent talents, or ‘negative capability’, are the untapped skills and disposition of openness to multiple voices and ideas, patience to wait for clarity to

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emerge, and tolerance to avoid premature decision-making in the face of ambiguity and uncertainty. Whilst ‘negative capability’ may seem like a strange expression it is the hallmark of strategic leadership. The book’s aim was to expand our understanding of strategic conversations with scenarios, and I hope that I have managed to achieve that aim, and that the scenario process impacts positively any management team engaging with it, as well as providing opportunities for further academic research and knowledge development in the future. George Burt August 2023

Contents Preface

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Chapter 1 Change, Failure, Success, and Foresight 1 Introduction 1 The Nature of Change 2 Change, Silent Transformations, Limited Vision, and Unexpected Shocks Organisational/Business Failure 9 Lessons for Managers in any Organisation 13 Emergence 14 From Meaningless to Meaningful 15 Foresight 17 Otherness 20 Dialogue, Strategic Conversations, and Scenarios 21 Building the Rationale for Scenarios as Strategic Conversations 22 Short Case Study Consolidating Chapter Discussion 24 Setting the Objectives of the Book 27 References 28

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Chapter 2 Genealogy and Evolution of Scenario Planning 32 Introduction 32 Genealogy and Foundations of Scenario Planning 34 Uncertainty in the Contextual Environment 37 Evolution of Thinking About Scenario Planning 40 Conclusion 56 References 56 Chapter 3 Business Idea and the Basis of Organising 59 Introduction: Organisation or Organising 59 Organising and the ‘Business Idea’ 61 Business Idea Fundamentals 62 Strategic Conversations and Flux and Flow 66 SWOT Analysis as the Traditional Mode of Capturing Aspects of the Organisation and its Contextual Environment 68 Implications for Organisational Success and Delivery of Public Goods References 70

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Chapter 4 Strategic conversations, scenario process, and reframing business idea 72 Introduction 72 Case study 1 – CBC Scotch: Whisky and Spirits Sector 74 Research Approach and Data Collection and Analysis 75 Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea 76 Workshop Two – Scenario Building 80 Workshop Three – Strategic Implications 86 Case Study 2 – CLCS and the IT Consulting Industry 90 Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea 92 Workshop Two – Scenario Building 95 Workshop Three – Strategic Implications 103 Case Study 3 – CP and IPC Magazines: the Publishing Industry 107 Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea 108 Workshop Two – Scenario Building 111 Case Study 4 – PRBV and the Role of Technology in Rail Transportation 118 Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea 120 Workshop Two – Scenario Building 121 Conclusion: Case Study Insights, Time, Reframing, and Strategic Conversations with Scenarios 126 References 128 Chapter 5 Coping with Surprises and Potential Disruptions: Towards an Understanding of the Role of Negative Capability 130 Introduction 130 Coping with Insights and Revelations from the Scenario Process: The Role of ‘Negative Capability’ 132 Negative Capability and the Role of the ‘Surprise-Free’ Scenario 135 Scenarios, Negative Capability, and the Search for the Basis of Organising 141 Negative Capability in Other Contexts 143 Conclusion 144 References 145

Contents

Chapter 6 Reflections in the Twilight 148 Seeking Clarity on the Purpose of any Scenario Project 148 Expect the Answer? Can’t See the Answer? Reject the Answer? 150 Bias, Knowledge Limitations, Simplistic Thinking, and Surprise 151 Do it, Move on, New Distractions Emerge, Yet the Digestion/Reflection Period Needed 151 Link to (Strategic or Policy) Action Unclear 153 Fragmentation and the Need to Develop Shared Language and Meaning 154 Differences of Opinions and Fragmentation on the Way Forward 156 Time Passes and People Forget Insights from the Scenario Process 157 Do it for the Client/do it with the Client/Let the Client do it Themselves – Scenario Process Ownership and Engagement 158 Design of the Scenario Process 159 Awareness of Challenges for Scenario Planning Projects 162 Group Composition and Culture of Openness/Questioning and the Management of the Strategic Conversation 163 The Skills Required to be Demonstrated and Employed by the Facilitator 164 References 165 Chapter 7 Conclusion – How to Employ the Scenario Process 166 Phase 1 – Management Team Initial Interviews 167 Phase 2 – Workshop 1 Including Feedback and Confirmation of Interview Themes, Agreeing on the Scenario Agenda, and Development of the Initial Business Idea 169 Phase 3 – RP Search and Background Research 171 Phase 4 – Workshop 2 Including Scenario Development and Initial Insights 172 Phase 5 – Incubation Period, Reflections, and Building Support 178 Phase 6 – Workshop 3 Including Exploring and Developing Scenario Insights, Mapping Strategic Implications, and Reframing the Business Idea 179 Phase 7 – Final Summary Presentation Including Future Actions and Change Implications 181 Phase 8 – Management Team Closing Interviews 181 References 182 Index

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Chapter 1 Change, Failure, Success, and Foresight The Only Constant in Life Is Change. – Heraclitus of Ephesus (530–470 BC)

Introduction The introduction to the book explores the above quotation and its implication for organisations – to understand the nature of change and its link to the sustainability of any organisation. The world is in an unending state of movement – ‘all things flow’. Using words such as ‘organisation’ and ‘sector’ implies a static or fixed position. It fails to recognise the ongoing decisions or events that shape the basis of organising. So, words and language are tricky, yet it is through dialogue, exchanges, and conversations that we understand our unfolding situation. The pervasive nature of change and its unrelenting and ongoing tendency, although there are slow-moving aspects as well as more unpredictable elements, should be embraced rather than disregarded. By embracing and grasping these unpredictable elements, they offer moments of potentiality and opportunity if they are understood and captured (Jullien, 1995). Why is it important to be concerned about the nature of change and its implications for organisations? Recent events highlight the impact of the unpredictable aspect of change. For example, the conflict between Russia and Ukraine and the impact of oil and commodity prices on household disposable income. The impact of climate change, varying weather conditions, and food harvests and shortages across the food supply chain. The use of digital money, COVID and home working, and changes in consumer expenditure and the steady decline in high street shops. Technological innovation has driven the growth of digital streaming, whether films, music, or podcasts, with the impact changing the nature of entertainment and how, where, and when it is consumed. The argument throughout this book is based on the necessity to understand the pervasive nature of change and the constant need for managerial vigilance, imagination, and creativity to perceive and re-perceive the ongoing nature of change. The ability to be open minded, be flexible in thinking, question assumptions, look for and embrace novelty, and be able to make sense and understand the implications of the constantly changing world is the hallmark of any thoughtful manager. In doing so, the thoughtful manager is carefully crafting and managing the basis of organising, to overcome the dominant approach to searching for stability. Such an approach requires a new mindset to embrace the changing world. Is the mindset like playing chess with a certain degree of rules and moves that can be worked out from a playbook? Or is it more about developing a capability of ‘attunement’ to the ongoing dynamics of the changing world? Attunement is about being able to

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recognise, grasp, interpret, and understand something that is vague, ill defined, and pregnant with opportunity if it is apprehended. Such an approach is understood as ‘foresight’. Foresight is understood as: a refined sensitivity for detecting and disclosing invisible, inarticulate, or unconscious social motives, aspirations, and preferences and of articulating them in such a way as to create novel opportunities hitherto unthought and hence unavailable to a society or organization. Foresight is achieved through a re-education of attention. It requires a sustained and painstaking dismantling or deconstruction of how we understand the world and the language that shape our dominant habits of thought (Chia, 2004, p 22).

This is central to the idea of the book – understanding ongoing change to develop foresight in the here-and-now through dialogue and strategic conversation with scenarios. Doing so will bring about momentary stability of lived experiences and provide insights for organising (Chia and Nayak, 2107). It is linked to and underpinned by the idea of socially negotiated order and socially situated sense-making (Tsoukas, 2009). The scenario process is designed to open up a safe, creative space for dialogue, relational interaction, and exchanges, where ideas, experiences, contradictions, and tensions are surfaced to move from a state of equivocality between members of a management team to a position of negotiated understanding, shared meaning, and foresight (van der Heijden, Bradfield, Burt, Cairns and Wright, 2002; Burt, Mackay, van der Heijden and Verheijdt, 2017; Burt and Nair, 2020). However, there is a wide range of personal and organisational limitations, biases, and beliefs that act as a deterrent or barrier to embracing the ongoing nature of change, developing shared understanding, and generating foresightful insights. Paradoxically, when we speak of ‘organisation’ or ‘sector’ or ‘market’ (which are nouns), we default to a position of stability, whilst change never stops. A new mindset is required to understand that change has primacy over stability, and that ‘organising’ is the continual making, un-making, and re-making of ‘organisation’. The chapter explores and discusses the nature of change and the sources generating change. Movement and change are constant and surround all organisations. It is how organisations view change and engage with their changing world that is fundamental to success and survival. Yet, there are competing views about the nature of change and these views influence how individual’s and management teams engage with the process of scenario planning and the development of foresight (Raimond, 1996; Cornelius, Van de Putte and Mattia, 2005). Next, we will explore two ways of understanding and engaging with change – the more generally accepted idea that change is episodic in nature, or that change is the natural way of the world.

The Nature of Change Change is the natural way of the world – everything is constantly shifting, changing, and in the process of becoming something other than what it was before (Whitehead,

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1978; Cooper, 1976, Chia, 1999). As humans we are constantly changing, getting older every minute, day by day, whether we like it or not. All our experiences have an impact on us. However, not all aspects of change happen at the same rate or degree, or the same time, or at the same speed. Some things change slowly (almost imperceptibly); some things change in front of us, and their underlying implications are hidden; and some things change quicker and more frequently and are more obvious. The challenge is to draw out particulars or specifics from our experiences and then generalise about these abstractions and their meaning and implications. No matter what we do or wish for we cannot hold back change. In this respect, Heraclitus concluded that nature is change. Like a river, nature flows ceaselessly and ever onwards, the nature of the flow is constantly changing. When we look at a river, we see water currents flowing (fast or slow depending on rainfall). What we don’t see is the changing riverbed, the changing sediment and silt, the movement of stones, pebbles, and other materials in the river. When it rains the level of the river rises. When the rain stops the level of the river falls. Yet, when we next look, we still see the river. The river becomes a ‘thing’ or an ‘object’ with permanence. Accepting that change is constantly occurring contrasts with Parmenides, who maintained that there is no “is not”, only “is,” implying that there is only substance and stability. Something cannot emerge from nothing; it must have already existed, so if the senses do not sense or see something then it is a flaw in human nature. What does this imply for making sense of our changing world? The problem with such an understanding is that we move so quickly from the river to the word ‘river’ and then we forget that there was anything wet, violent, rising and falling, haunting and life-giving. One river becomes like the next river; we move from this river here, with its twists and embankments, to characterisations of length, depth, flow, cargo shipped, fish extracted, and so on to the next river (unquestioningly). It merely becomes a resource without having a being or meaning outside of this being put into a place. By not being able to move beyond the word ‘river’ we are unable to discriminate difference (in each unique river). Whitehead (1978) calls this ‘the fallacy of misplaced concreteness’. It highlights a limitation of perception and language and therefore making sense of change is likely to be problematic. Managers try to maintain organisational stability; they set out organisational goals and navigate and take actions towards achieving them, making small adjustments as and when required (Garud and Van De Ven, 2002). The organisation stays the same and the aim of achieving its goals also remains the same over time. Yet, when problems arise or when targets or not met how do most managers respond? The usual response is short-term problem-solving, otherwise understood as ‘firefighting’. Look at the problem, define the solution, and take the necessary action. However, has the fundamental issue driving the problem been resolved? The irony here is that the organisation rewards the firefighting manager, not the foresightful manager who saw the conditions of change before they manifested and impacted the organisation. The analogy of an ‘iceberg’ is helpful to understand the ‘problem’. The tip of the iceberg is ten percent about

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the surface of the water. The rest of the iceberg, the ninety percent, is hidden. We are reactive to what we see, not what exists and is hidden. When considering the changing world is it possible that both Heraclitus and Parmenides could be correct? Heraclitus’ view is that we need to understand the ongoing processes of change with the implication to be ever watchful, ever vigilant, and ever ready to ‘see’ beyond the obvious, the taken-for-granted, and the inability to differentiate the nature of each thing as it appears to us. This would require an ability to look for the unseen or seemingly invisible aspects of the world that are beyond our immediate comprehension and worldview and therefore were perceived not to exist. Parmenides, on the other hand, would argue that systems and structures do not, or are at least slow to, change. The implication would be that the organisation would develop its business or operational or marketing plans based on the continuity of the past into the future. Following Parmenides, strategic analysis would be undertaken to support planning assumptions and goals and objectives setting. The question for organisations is, how often are those goals and objectives achieved? If there is such stability in the world, then why plan? The tension between Heraclitus and Parmenides and how to understand the changing world is central to the ideas and approach in this book. Acknowledging that change is ongoing and constant recognises following the logic of Heraclitus. Doing so results in a recognition and acceptance that process is primary, and that structure or substance are accomplishments from organising (Cooper, 1976; Cooper, 2007; Chia and Holt, 2009). “A process orientation prioritizes activity over product, change over persistence, novelty over continuity, and expression over determination. Becoming, change, flux as well as creativity, disruptions and indeterminism are the main themes of a process worldview” (Langley and Tsoukas, 2017, p 2). In contrast, a substance view “recognises the occurrence of processes but it considers them incidental and explains them in terms of substances: processes contingently happen to substances, but the later are essentially unchanging in nature” (Langley and Tsoukas, 2017, p 3). The process/substance debate has implications to understand the organisation/environment relationship, strategising and strategic conversations, and importantly the role of scenario planning in engendering novelty and foresight. On the one side of the tension, the substance viewpoint is the separation of organisation and environment, based on a Cartesian or dualism logic. The Cartesian dualism logic recognises that the manager/strategist is independent of their environment, and that thinking and deciding are separate from acting (Van de Ven and Poole, 1995; Garud and Van de Ven, 2002). Senior managers do the thinking, and operational managers are then tasked to implement the (senior management) thinking. Such an approach is deeply ingrained in Western (business) culture. Cartesian dualism is based on the separation between mind and body, between mind and matter, between thinking and acting, and between self and organisation (Burt, Wright, Bradfield, Cairns and van der Heijden, 2006). The ability to reason is the unique characteristic of humans (i.e., decision-makers). Consequently, for the Cartesian manager/strategist there is a

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clear distinction between what he or she thinks and what he or she (or others) subsequently acts (Eden and Ackermann, 1998; Mackay and Zundel, 2016). On the other side of the tension, the process viewpoint emphasises lived experience, interaction and relationality, absence/presence, potentiality of the unfolding situation, with events and experiences emerging and disappearing, and bringing past events and experiences to bear in the present (Whitehead, 1929/1978). For Whitehead, a different explanation based on the bifurcation of nature into primary and secondary qualities: the difference is not, then, between mind and matter, but between appearances (sense data) and the ‘causes’ of things; for Whitehead, there is only one nature – comprising both the radiance of the rainbow and its molecular structure. Identifying causality is therefore problematic. This implies that organisations face a “radically open future” (Bosma, Chia and Fouweather, 2016, p 15) where today will not be the same as yesterday, that tomorrow will not be the same as today. It will be full of new experiences that will need new and novel interpretations. The process viewpoint emphasises the creative act of relating and connecting experiences in novel ways to help understand the incessant nature of the changing world. Looking outside of the process perspective, Francois Jullien (1995; 2004), a sinologist, has interesting and relevant ideas that can help in understanding the creative act of relating and connecting experiences. Through the creative process possibilities open up, with insights revealing ‘the propensity of the moment’ (Jullien, 1995). The unfolding world is brought to life through face-to-face relational dialogue, making it possible for new knowledge to emerge (Tsoukas, 2009). A dialogical approach is based on ‘social interaction’ (Tsoukas, 2009, p 941), when new distinctions in understanding of experiences are developed (i.e., foresight). Dialogue is the dynamic interaction between individuals where words and ideas stimulate discussion, debate, and deliberation. Relational dialogue and exchanges provide the opportunity and space for plurality of views to be surfaced and heard. The plurality of views about experiences, with differences, tensions, and conflicts of opinion, are made explicit. From the relational dialogue individuals negotiate and make sense of the raw undifferentiated flux of everyday life to draw out the generalisable and relate this to their experiences (Cooper, 2005; Hosking, 2011; Valentini, Romenti and Kruckerberg, 2016). Out of the disorder and equivocality, socially negotiated order emerges (Eden, 1992; Burt and Nair, 2020). Why is this important? The present is pregnant with imminent possibilities, and the challenge is to bring them to life. In a constantly changing world such an approach is the essence of strategic leadership (Shaw, 2014). As the world is continually changing with no clear, definitive basis of understanding, it challenges the logic of the Cartesian approach which is based on clearly defined boundaries between ‘organisation’ and ‘external environment’. Talk and dialogue overcomes such boundary constraints and limitations as experiences are ambiguous and equivocal. Shared meaning from relational dialogue produces a more ‘whole’ understanding of experiences that boundary-defining approaches cannot do. Shared meaning moves individuals from an equivocal to an unequivocal position. It is the creativity that is released from, and during, talk and dialogue that is the foundation

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of developing shared meaning (Putnam, 2003; Putnam and Fairhurst, 2015). This is the essence of strategic conversations with scenarios.

Change, Silent Transformations, Limited Vision, and Unexpected Shocks Silent transformations, in contrast to change that is evident and well known, are slow advances of natural phenomena, processes that progress imperceptibly. It is the failure to notice the effects of imperceptible changes, which is due to the conditioning of many individuals, who are bounded by their experiences and assumptions and therefore do not see change as the natural state of the world. So, what are silent transformations? “Silent transformation does not use force to thwart anything: it does not fight; but, as the saying goes, makes it way, infiltrates, spreads, branches out and becomes pervasive – spreads like a stain. It integrates as it disintegrates; allows itself to be assimilated as it takes things apart even to the measure of that which assimilates it” (Jullien, 2011, p 66). Jullien offers an alternative (Chinese) perspective from the dominant Western thinking about causal connections and relationships. Connections and relationships are reproduced like nature, such as rhizomes or tubers in plants which move and grow in unpredictable ways and at unpredictable rates. “Rhizomic change resists the linear retracing of a definite locatable origin of initiation” (Chia, 1999, p 222). For gardeners, who pull out seedling trees that were not deliberately planted, will look at the seedling tree roots to see the randomness of the root system and understand rhizomic behaviour, i.e., unowned change (MacKay and Chia, 2013; Chia, 2014). Understanding that the changing world behaves in such a rhizomic manner reinforces the weakness of systems modelling and strategic analysis approaches (mentioned above). Why and how do these transitions remain unseen? Silent transformations occur when there is a “mutual correlation of factors” (Jullien, 2011, p 7), whether local or global, known or unknown, that combine to create unobserved change. These silent transformations are unseen as the range and extent of individual and collective scanning and sense-making processes are infrequent and based on stable assumptions. Stable assumptions limit the extent of identifying contrary information and insights; therefore, the fidelity of managerial sensing is an issue. Stable assumptions are unrecognised weaknesses that can hinder an individual’s ability to sense and understand the changing world. Weaknesses that are known are less problematic, but weaknesses that are not known and unrecognised result in reduced scanning to make sense of the changing world (Shaw, 2014). Stable assumptions typically include selective (competitor) perception (Zajac and Bazerman, 1991), myopic managerial focus (Miller, 2002; Levinthal and Posen, 2007), and creating cognitive inertia in middle and/or top managers (Tripsas and Gavetti, 2000). The urgent drives out the important, and reactive problem-solving dominates. The irony is that when seen

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these silent transformations challenge managerial assumptions and understanding of the seen and familiar as well as the unseen. For any manager or strategist who is not vigilant and open to interpreting and reinterpreting events and experiences then, the outcome is likely to result in shocks and surprises (Meyer, 1982; Meyer, Brooks and Goes, 1990; Ringland, 1998; van Notten, Sleegers and van Asselt, 2005) that may impact organisational performance and sustainability. As we will discuss in the next section the processes and factors that bring about shocks and surprises exist and surround us constantly; it is just that the organisation does not consider or invest in approaches to recognise such conditions. Research by Hamel and Prahald (1994) identified a 40/30/20 managerial rule of thumb about the time spent by executives and senior managers looking outward and forward. Hamel and Prahalad stated “that about 40% of a senior executive’s time is devoted to looking outward and, of this time, about 30% is spent peering three, four, five or more years into the future. Of that time spent looking forward, no more than 20% is devoted to building a collective view of the future (the other 80% is spent considering the future of the manager’s particular situation). Thus, on average, senior managers devote less than 3% (40% x 30% x 20%) of their time building a corporate perspective on the future” (1994, p 123). So, that equates to 5.4 days per annum or 1.44 hours per week (based on 45 working weeks/225 working days per calendar year). This raises many questions about (i) the adequacy of the ongoing process of sensing to ensure success and sustainability of organisations, (ii) the efficacy of the nature of strategy/strategising in practice, and (iii) the possibility of organisational failure, given the limited time trying to understand the changing world. What else may impact the process of making sense of the changing world? Individuals have inherent limitations that condition the extent of sensing and interpreting their changing world. Two individuals can look at the same phenomena and interpret it in diametrically opposite ways. Limitations that impact the capability to engage with and make sense of the changing world include overconfidence bias, hindsight bias, anchoring effect, framing bias, immediate gratification, selective perception, confirmation bias, availability bias, self-serving bias (Kahneman and Tversky, 1981; Kahneman and Tversky, 1981; Tversky and Kahneman, 1982; Janis, 1991; Winter, 2004; Wright, van der Heijden, Bradfield, Burt and Cairns, 2004), myopia (Levinthal and March, 1993; Larwood and Whittaker, 1997), and hyperopia (Burt, Mackay and Perchard, 2015). Confirmation bias occurs when a manager is overconfident about their ability to predict future events. Usually based on a reliance on past experiences. Hindsight bias is a lack of awareness by a manager to unfolding events and then being wise afterwards, as if they knew about the event all along. Anchoring bias occurs when (new) information is received, existing assumptions or understanding are treated as sacrosanct, and new additional information is subsequently ignored or disregarded. Framing bias occurs when a manager looks at a situation or problem and they have a tendency towards defining it in terms that they are familiar or comfortable with, which then results in the situation or problem manifesting later. Immediate gratification bias occurs

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when the first solution to a problem is defined, and a certain satisfaction precludes search for any alternative solution. Managers are conditioned over time to look at situations or problems from a narrow or selective perspective, which again limits the search for alternatives. Again, conditioning over time impacts the extent of managerial search when problems occur, with managers looking for evidence that confirms the choice that they have made or are about to make. When confronted with a situation or a problem managers tend to rely on available information or insights from past experiences that served them well, which reduces any search for alternative explanations. On occasions managers make decisions that best serve their own interests, disregarding the best interests of the organisation, which again reduces the search for alternative explanations. Myopia occurs when a manager(s) focuses and concentrates on day-to-day and immediate issues ignoring the hidden processes driving the situation that shape the longer term and provide insights about the changing and unfolding world. Hyperopia is the state of continually focusing on the longer term and the future whilst ignoring the day-to-day and short term (Burt, Mackay and Perchard, 2015). The search for the ‘holy grail’ of success is unlikely to be achieved, given the limited time attending to the flux and flow of processes in the changing world. In addition, many of these limitations occur because of either bounded rationality (Simon, 1957; Simon, 1972) or groupthink in organisations (Janis, 1991). Bounded rationality occurs when managers believe that they have sufficient information to take a decision, without them recognising the limitations of their existing knowledge. Decisions that are made then satisfy the manager and satisfy a limited set of objectives. Groupthink occurs when members of a decision-making group are cohesive and comfortable within the group, and no member of the group raises any concerns or questions about decisions that are about to be made. Preserving the cohesiveness and harmony of the group is prioritised over making sense of the constantly changing world. Preserving the cohesiveness and harmony of the group also reduces the search for alternatives. Janis (1991) identifies eight characteristics of groupthink and how these influence individuals recognising (or not) events and experiences and, as a consequence, reduce the ability to make novel connections between events and experiences. The limitations discussed above may be evident in any management team, without them realising the implications of strategising and sensing of their changing world. In addition, belief systems that evolve over time in an organisation, regardless of size or context, impact the ability to engage with strategising and making sense of the constantly changing world and proactively embrace disorder and equivocality to socially build agreement. Beliefs include managerial recipes (Grinyer and Spender, 1979) and industry recipes (Spender, 1989). The process of socialisation and accumulation of experience and decision-making, about what works/what does not work, and repeated actions towards the achievement of an organisation’s plans and goals are the underlying basis of a managerial recipe. Industry recipes again emerge from the wider-ranging industry processes of socialisation whereby professional memberships, attendance at conferences, and shared experiences create rituals and rites of profes-

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sional passage and local traditions create isomorphic behaviour that is replicated across organisations set within a shared industry. These industry recipes are reinforced as managers move from one organisation to another organisation within the same industry. These limitations, biases, and recipes impact the ability of any manager(s) to be open minded and flexible in thinking, to embrace and make sense of their changing world. Events are seen in isolation. Events are taken at face value and, consequently, considered relevant or ignored. If they are considered relevant decisions will be made about their significance and impact. Events seen in isolation are not interpreted in relation to previous events, patterns are not detected, and therefore clues about the unfolding world are missed. The essence of ‘foresight’ is to draw out interpretations by defining and redefining past experiences in consideration of current conditions and experiences. Whitehead (1978) offers an alternative to these limitations and biases, which are explained by a Cartesian logic or ‘bifurcation’ between nature and mind, by emphasising the subjective nature of the world and the need to be creative in exploring experiences and connecting events. Consequently, individuals and collectives will likely be in reactive mode, rather than sensing mode, creating novel insights about the past and the present in the present. Whitehead, by offering a process perspective, is encouraging ongoing engagement with the unfolding world. Moreover, limitations, biases, and recipes based on past experiences and decisions reinforce that the organisation is likely to continue to be successful in the future, navigating towards pre-determined goals and objectives. So, maintaining the stability of the organisation in the face of the changing situation is the hallmark of ‘good’ management, as it reinforces beliefs and recipes that worked in the past. Making sense of the changing world and its implications for organising is limited as it would undermine the perception that management are in control of their future. Yet, a regular occurrence and feature of managing are the ongoing debates, discussions, explanations, and justifications as to why the organisation did not achieve its intended goals and objectives. The assumptions underpinning the goals and objectives remain constant and are projected into the next planning period. If such a situation continues into subsequent planning periods, the organisation is likely to be in continual, reactive problem-solving mode. If this is the case then the risk of failure is ‘normal’, and stability is an illusion. By understanding the implication of failure as an expectation it will encourage a mode of continual sense-making.

Organisational/Business Failure It is important to differentiate poor management of operations and day-to-day activities from an inability to perceive and understand the processes of movement and change and redefine and reinvent the business. Typically, poor management of operations includes poor cash flow management where debtors (i.e. sales and invoice collection) take

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longer to be received than the time the organisation takes to pay its creditors (i.e. suppliers); borrowing that exceeds the ability to repay given the cash flow problems; overdependence on one or several major customers and an issue emerging that impacts sales or cash flow management, which is related to the two previous points; poor planning that is short-term focused and lurches from one missed target to another; and fragmentation between the management team which results in in-fighting and political gamesmanship and limited focus on managing the present and the future. Throughout the last five decades there have been many examples of successful organisations failing and going out of business. Well-known and previously successful businesses include Blockbuster; Polaroid (which was in business for over six decades), known globally for its instant picture cameras, which yet did not perceive or understand the technological changes and impact that digital cameras would have on its photograph films business; Toys “R” Us (a business which was in business for seven decades) primarily based on bricks and mortar that did not perceive the growth of technology-based online retailers, such as Amazon, and the change in consumer buying habits to online; Borders Bookstores (a business which was in business for four decades) that did not perceive the technological changes and changes in consumer preferences that drove the growth in e-readers and digital books and online retail; Tower Records (a business which was in business for five decades), primarily a bricks and mortar music and film retailer, that did not perceive technological changes and peer-to-peer file sharing of digital music (i.e. Napster) that ultimately brought about the growth of businesses such as Amazon, Apple Music, and Spotify; and Phones 4u, a UK mobile phone retailer (which was in business for just under two decades) that went out of business after the four major mobile providers withdrew contracts and set up direct-to-customer retailing. Blockbuster is an interesting case of failure and is explored in more depth next. Blockbuster combines failure to understand ongoing change in the Blockbuster context, as well as poor management decision-making that resulted in its downfall. The Blockbuster discussion highlights several important issues for this book. First, the challenge of focus on the preservation and maintenance of the business model in contrast to developing and creating a vision for the future that reflects the basis of organising in a changing world. Second, the seduction of past success that limited creativity and the search and need for innovation to redefine the organisation. Third, blind spots due to rigid assumptions and biases that hinder the search for emergent change. Fourth, the focus on incremental change rather than reframing and redefining purpose to reinvent the business. Finally, the (in)ability to make sense of change, to harness and exploit insights about the changing world, and to make learning, unlearning, and foresight an integral element of managerial capability.

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Blockbuster (1985 to 2010) Blockbuster started renting VHS and Betamax videos in 1985, exploiting the emergence of technological innovation to watch movies at home and the desire of movie companies to generate new revenue streams. The Blockbuster approach was based on a business model of bricks and mortar in-store rental of movies and subscription membership with return of movies in person or by post. If the movie was returned late, then a late fee was imposed on the renter. The Blockbuster business had an advantage from its scale, and movie production companies agreed to Blockbuster having a 28-day window prior to the release of videos to any other rental businesses. By 2010 Blockbuster had over 3,000 Blockbuster rental outlets. Blockbuster complemented the bricks and mortar approach by launching, in conjunction with NCR, movie vending kiosks. In the USA and the rest of the world, Blockbuster at its peak employed over 100,000 people. Initially movies were in VHS or Betamax format, and as technology transitioned DVD became the dominant mode of watching movies at home. David Cook, the entrepreneur behind Blockbuster, was a computer scientist and used algorithms to track consumer demand for movies and link the demand to stocks of Betamax/VHS/DVD movies. Blockbuster developed a centralised logistics and distribution centre in Dallas to fulfil demand in the various Blockbuster outlets. The business model was replicated in many cities throughout the USA as well as Europe and the rest of the world. The rental outlets were owned by Blockbuster as well as by Blockbuster franchisees. Blockbuster consolidated its position in the bricksand-mortar movie rental market through several acquisitions of competitors. Subsequent changes in ownership of Blockbuster resulted in the development of a market penetration approach by adding music, books, toys, and clothing merchandise related to movies in stores. Here is evidence of Blockbuster building on past recipe of success. Interestingly, Netflix emerged as a competitor to Blockbuster in 1997. The Netflix business model of DVD rental was based on a fixed monthly subscription, with no late return fees. It was seven years later before Blockbuster dropped the late return fees from its business model. As a consequence Netflix developed its customer base at the expense of Blockbuster. Initially Netflix struggled to produce profits and in 2000 Netflix approached Blockbuster with the intention of being acquired by Blockbuster. The approach was rejected by Blockbuster, focusing on maintaining the existing business model to the detriment of building a future vision. Blockbuster continued with its market penetration approach, adding video games to the range of products that could be rented. To support this approach Blockbuster acquired Gamestation. By the early 2000s Blockbuster was incurring losses. To expand demand for Blockbuster-rented movies Blockbuster invested in over 6,000 movie vending kiosks. Partnerships were another feature of Blockbuster’s approach to protecting its market position, with partnerships providing Blockbuster access to its customer base and offering movie rental that was not previously offered. Again, evidence of Blockbuster building on past success and incremental change which reinforces past success.

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Blockbuster held agreements with the major movie companies to have an exclusive access period to new movies prior to their general release to other movie rental businesses. The situation changed in 2009 with these major movie companies looking to maximise revenue from cinemas and they imposed a 28-day restriction on Blockbuster as well. Here is evidence of blind spots due to biases, protecting the business model that limited the openness and readiness to detect emerging change by asking in what novel way this could be an indicator of the future.

Technological Innovation, Patterns, and Blockbuster The emergence and Web 2.0 internet applications facilitated sharing and collaboration between individuals and organisations. The move from Web 1.0 and its static content to user-generated content enabled the growth of, for example, YouTube and social media organisations, and this would become the platform for streaming. Interestingly, it was Hong Kong Telecom that launched the world’s first video-on-demand (VOD) service in the mid-/late 1990s, which was the base for a host of entrepreneurial start-up organisations such as YouTube, Netflix, and Hulu. YouTube was the first major video-sharing platform, innovating and creating an easy-to-use video streaming platform where individuals could create, upload, and share their own video recordings. In 2005, Hypertext Markup Language (HTML) became the standard language for applications to upload to the internet. Subsequent innovations facilitate the growth of video streaming. In the mid/late 2000s streaming demand surpassed DVD rental as the dominant mode of watching movies at home. Ten years after its establishment in the movie rental market Netflix entered the streaming market. It initially offered 1000 movies with no late fees. Internet and broadband technological innovation facilitated the growth of this approach. Netflix also invested in the development of a ‘Netflix box’ to stream movies; however, they were hampered by the length of time required to download movies. Partnering with a wide range of technology businesses, including Amazon Web Services, enabled Netflix to move all its subscriptions to the streaming platform. These were early indicators of emerging processes of change, yet Blockbuster did not perceive this unfolding situation due to past success and prior incremental investment based on its business model. Blockbuster continued to focus on its retail stores and DVD subscription model. Events and experiences were seen in isolation. With events seen in isolation and not connected to past events, patterns were not detected or defined in terms of the emerging situation in the here-and-now. The stable organisation navigates towards goals and objectives, yet nothing endures in the constantly changing world. Netflix started developing its own original programmes with the launch of ‘Orange is the New Black’, which drew new customers into the Netflix customer base. New original programming subsequently became a major investment for Netflix. In addition, Netflix bought the rights to the fourth season of ‘Breaking Bad’ in 2010 and this created the consumer phenomenon of ‘binge watching’. On the back of the growth of its customer

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base, Netflix signed a deal with Disney in 2010 to add its portfolio of movies that could be watched on the Netflix platform. Technological and digital innovation simultaneously helped Apple and Amazon to expand their portfolio of offerings, adding new and more competition for Blockbuster. Blockbuster did not make sense of or respond to these signals of change and was late in trying to transition to a streaming platform. Their approach was based on a combination of acquisition of an existing digital platform and the establishment of new partnerships; however, integration to gain scale proved problematic for Blockbuster. Prior to 2010 the global economy experienced the global financial crash, which had a detrimental impact on demand for Blockbuster products resulting in a fall in revenues. Blockbuster had debts of over US$1 billion, and although it tried to restructure its debt it was unable to find a resolution with creditors, eventually filing for Chapter 11 Bankruptcy (Davis and Higgins, 2013). The five points noted above: the challenge of focus on the bricks-and-mortar DVD rental model (in contrast to developing a vision for the future); the seduction of past success of the growth of Blockbuster retail outlets domestically and globally (hindered the need for creativity and innovation); blind spots due to biases about the preferred mode of watching movies at home (prevented the need to detect emerging consumer change); incremental change and acquisitions within the existing business model (rather than exploring peripheral and emerging change to redefine Blockbuster’s purpose to reinvent the business); and the (in)ability to make sense of change, especially technological innovation, to harness and exploit insights about change (and limited learning, unlearning, and foresight within Blockbuster management). Sadly, a familiar tale of managerial hubris.

Lessons for Managers in any Organisation The focus of this book is to help managers in any organisation, whether small, medium, or large, private sector, public sector, or the not-for-profit sector, in any part of the world, to be confident, open, and able to engage, perceive, and understand the processes of change and to make that an integral part of the organisation’s approach to strategy or policy development. Creativity, innovation, and foresight are the lifeblood of managing and organising. These features are central to the approach of strategic conversation with scenarios. Scenarios are traditionally understood as stories developed about the future, linking the past to the present and to the future. However, the approach developed in this book is different. The scenario process is about providing a safe space for dialogue and exchanges, creating stories that link the past to the present, and in the process redefining the understanding of the past and the present to create foresight in the here-and-now, the art of strategic conversation with scenarios. The book will trace the origins of contemporary scenario planning as well as its evolution over time.

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The book is intended to help managers embrace the scenario process, whether it is for the first time, as well as provide food for thought for those managers who have engaged with the scenario process in the past. The book provides an alternative approach to the systems analysis/modelling approach that is prevalent in the scenario planning literature. The book will also challenge how managers consider foresight – future oriented or foresight in the here-and-now? In addition, insights from many scenario projects will be offered to help improve the application and efficacy of the scenario process in practice.

Emergence If you look back at your recent experiences, are there any occasions or events that were surprising? Why were they surprising? Was it the first time that the surprising event or experience occurred? Out-of-the-blue events happen, and we seem to be unable to explain why they occurred. A recent example is Mallorca hit by heavy snow as storm Juliette hits Spain. Spain is not known for cold temperatures, the opposite; its winter daily average weather ranges between 10 °C and 18 °C. The UK recently experienced shortages of imported Spanish tomatoes, lettuce, and cucumbers, with supermarkets rationing these products. Emergence is defined as the processes of unexpected or unanticipated events coming into existence or prominence. Emergence reflects unpredictability that organisations face and is inherently linked to the ongoing changing world. Emergence questions the role of strategic analysis to support managerial decision-making, as it uses pre-existing rules and laws that are imposed on the focal issues or concerns rather than a focus on lived experiences. Emergence is a natural feature of the constantly changing world. Events happen and are either seen and recognised, seen and ignored, or not seen. If seen and recognised, then it is about management judgement towards their relevance and importance for their organisation. Individual manager to individual manager may have different interpretations of recognised events. Individual manager to individual manager may or may not make connections between events. The world is not made up of enduring systems and structures. Events and experiences are different things to different individuals at different times. An event is precisely: something that appears to us as this or that thing, without claiming that it is ‘really’ something else. So, when we can ask ourselves every time: what do we see here? How is this here related to past experiences (for example, Blockbuster in 2010 compared to 2000), and what is different? What remains the same (for any organisation) is what Whitehead (1978) calls ‘positive prehension’; what does not remain is ‘negative prehension’ (the elements that are changing). So, events appear and disappear implies that what individuals and collectives need to assess events and perceive them afresh every time – and any links to past events (the company a few years ago,

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say) is something to be surprised about. So, we start the other way around. We don’t expect Blockbuster to be the same thing; it needs to be constructed, deconstructed, and reconstructed as an ongoing process. The challenge for a management team then becomes moving from an equivocal position of understanding to an unequivocal position about events, their experiences, and the related impact for their ‘organisation’. Ambiguity and vagueness about such events and experiences may result in no action. Continuing with the business-as-usual approach may be the default approach for many managers. However, unexpected events and unanticipated outcomes of events add to the challenge of managing and making sense of the ongoing changing world. For many managers this situation may be considered too complex to act, or it may seem too chaotic to begin to make sense. Many managers may believe that “the current state of the world is perceived to be different from the expected state of the world” (Weick, 2009, p 140) and that they have uncertainty about the approach to adopt to engage with the changing situation. To further complicate matters, emergence of unexpected events may (simultaneously) occur, as and when expected events are recognised. Emergence is born from the non-linearity of events. Emergence is born from the unpredictability of events. Emergence is born from unanticipated events and experiences, as well as from unintended consequences of events and experiences. It is not easy to understand the notion of disorder in the constantly changing world. All these conditions add to the potential uncertainty and equivocality between individual managers in a management team. Figure 1 below shows the relationship between emergence, ambiguity, uncertainty and the need for activity to develop foresight. Unexpected events

Surprising events Confusion Expected events

Ambiguity around events and occurrences

Expected events do not occur

Uncertainty as to their meaning of events and occurrences

Novel interpretation

Foresight

Figure 1: Emergence and Surprise.

From Meaningless to Meaningful How to bring meaning to unexpected occurrences? Such experiences are considered ‘bland’ but loaded with potentiality (Jullien, 2011). Blandness is the state of preconceptualisation of an event or experience, or a series of events and experiences. Meaning has not been attributed to such experiences. Blandness is contrasted with flavourful (Jullien, 2008), where pre-existing understanding constrains originality,

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imagination, and the creation of novelty. Metaphorically the ‘flavourful’ implies an inability to see novelty. “The flavourful, then, arises here, but from the Daoist standpoint, which opposes all that does not accord with the spontaneous, guileless movement of our nature. Blandness is the measure of this true naiveté: free from intention and thus never short of the mark” (p 56). Accepting blandness is about freeing the mind to develop authenticity and originality in understanding. Blandness seems to be a contradiction, as the world seems to be empty, yet it is full if you are open. “Blandness reappears here unchanged; what is simple is ‘all the more complete’, what is bland is ‘all the more dense and concentrated’. Blandness is more intense than any outright manifestation of intensity. Just as ‘easy, unaffected openness’ gives rise to efficacy and ‘calm’ opens the way to perfect understanding, or ‘remoteness’ extends the reach of meaning, blandness enables one most readily to achieve originality” (Jullien, 2008, p 132). Embracing blandness requires individuals and collectives to discern events in the context of their situation and create novel interpretations, recognising that they will be different with the passage of time. Openness, novelty, and authenticity is the basis of making sense of the changing world, perceiving and reperceiving events to engender foresight. The challenge for a management team is to create novel meaning about their experiences that help bring insight and shared understanding. Novel meaning emerges from the strategic conversation with scenarios and is the basis of foresight. How does novel meaning occur? An intervention that provides time and space to understand the equivocality of and about experiences; an intervention that challenges business-as-usual assumptions; a process to build unequivocal agreement between individuals about their shared experiences. Interventions create temporary interruptions and breakdowns in (current) understanding (Sandberg and Tsoukas, 2011). Interventions create and enable questioning of assumptions. Interventions create space for dialogue and exchange. An intervention “when productive, leads to self-distanciation, where individuals are able to take distance themselves from their customary and unreflective ways of acting as practitioners” (Tsoukas, 2009, p 941). How does this occur? Sandberg and Tsoukas (2011) argue that “it is primarily through temporary breakdowns that the relational whole of socio-material practice is momentarily brought into view” (p 344). There are three types of temporary breakdowns: first, “thwarted expectations, second, the emergence of deviations and boundary crossings, and third, awareness of differences” in understanding and managing (Sandberg and Tsoukas, 2011, p 348). Managerial expectations “are thwarted when a practice is disrupted because unintended consequences emerge, new realizations come about, or standards of excellence are not met” (p 348). Deviations in practice “emerge when new discourse items are introduced, or new actions appear” (p 349). Awareness of differences occur when there is realisation that “practices from the history (or from different parts) of the organization itself, practices present in other organizations, or new practices introduced in change projects” reveal insights that indicate limitations in the business-as-usual approach. The scenario process provides a safe space that is designed to challenge managerial assumptions and understanding of the changing world. In the

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following chapters the scenario process and temporary breakdowns, understood as moments of learning, insight, and reflection, will be discussed in more detail. Figure 2 below sets the role of scenarios to create time and space to help move individuals and groups from equivocality to novel shared insights. Temporary challenge to assumptions

Experiences

The changing world

Surprises Ambiguity and uncertainty

Equivocality

Scenario process Novel shared insights and foresight

Figure 2: The scenario process and breakdowns.

The scenario process provides time and space for relational dialogue to occur. Dialogue is the basis of creating distinctions (e.g., new insights) about previously ‘bland’ experiences. Distinctions in turn lead to self-distanciation, which enhances relational engagement and underpins and brings about foresight. Foresight emerges from such temporary breakdowns. Foresight is about making sense of the emergence of events and experiences in the constantly changing world. Foresight creates new understanding, new knowledge, and novel insights and is considered a momentary accomplishment. The accomplishment emerges out of dialogue, relational exchanges between individuals, which is understood as socially negotiated order (Eden, 1992).

Foresight The aim of this section is to explore the mode of understanding foresight in organisations. One description of foresight is concerned with having the (managerial) ability to predict what will happen in the future. Predictions and forecasts are usually made with the best intention about expectations about the future. These predictions usually are based on desired or preferred outcomes in the future and rooted in views of the past. From these predictions and forecasts the choices are taken to reach the desired destiny. However, as Wack (1985a, p 73) noted: Forecasts are not always wrong; more often than not, they can be reasonably accurate. And that is what makes them so dangerous. They are usually constructed on the assumption that tomorrow’s world will be much like today’s. They often work because the world does not always change. But sooner or later forecasts will fail when they are needed most: in anticipating major shifts in the business environment that make whole strategies obsolete.

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Foresight has a long and established history in business and management. Tracing its origins are fraught with difficulty; however, in this book foresight is grounded in the work of Alfred North Whitehead and his book ‘Adventures of Ideas’ (1933/1967). “Foresight is the product of insight” (Whitehead, 1967, p 89). However, Whitehead notes that the challenge in creating foresight is the problem of routine as society seeks and requires stability. Given the constantly changing world our knowledge and understanding is always incomplete. Therefore, stability may be an unachievable and ever-moving illusion. “Individuals (and organisations) face novelty of conditions” (Whitehead, 1967, p 93) and it is the emergence of novelty in society that requires the need for foresight, as novelty breaks routine. “The sorts of novelty entering into social effectiveness have got to be weighed against the old routine . . . the type of modification and the type of persistence exhibited in the immediate future may be foreseen” (Whitehead, 1967, p 93). Whitehead (1967) notes his concerns as “we are faced with a fluid, shifting situation in the immediate future. Rigid maxims, rule-of-thumb routine, and cast-iron particular doctrines will spell ruin” (p 96). Interestingly Whitehead states that “foresight requires an understanding of present conditions, as this may give us a grasp of the novelty which is about to produce a measurable influence on the immediate future” (p 93). This contrasts with the widely held view in the literature that foresight is about ‘memories of the future’ that are created to recognise future events, as and when they occur (Ingvar, 1985). Memories of the future “form the basis of anticipation and expectation as well as for the short and long-term planning of goal-directed behavioural and cognitive repertoire” (p 127). Foresight is considered “an organized social process; an intervention (in an organization), to create actionable and domain/context specific information or knowledge about the future” (Piirainen and Gonzalez, 2015, p 131). Focusing on the future, strategic foresight is defined as “an image, an insight, a picture, a concept about some future state or condition. It is an end state; it is not a process for getting to that end state, and it is not a particular instrument or tool for getting there” (Coates, 2010, p 1428). From here it is possible to identify tensions in understanding about foresight. First, is foresight based on here-and-now insights and understanding or some future time based on rehearsing possible futures? Second, is foresight about images of the future or re-perceiving of the past and present in the present? Third, is foresight based on extrapolations and projections of the past into the future or the creation of novel insights that challenge assumptions in the present? Foresight is traditionally based on systems analysis, modelling, and the use of dominant conventional codes and language (Burt, 2006). Here foresight is based on a structuralist (or representationalist) mode of knowing, with an enduring spatio-temporal and physical view of reality (Chia, 1997). Chia argues that there are constraints in such an approach – simple location and language. Simple location (Whitehead, 1926/1985) is based on definitive positions in time and space that are easily identifiable and locatable. Therefore, an organisation has its own unique and discrete space, and drivers of change are identifiable from research and analysis. Language is based on conventionally established codes, established bodies of knowledge, established laws, and rules of thumb.

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These codes are understood as ‘regimes of signification’ (Chia, 1997; Bosma, Chia and Fouweather, 2016). Regimes of signification are defined as a “set of conventionally established textual codes governing the organization and presentation of ideas, information, observations and conjectures in such a way as to render them acceptable” (Chia, 1997, p 73), for example, Porter’s five forces of industry competition, economic laws such as supply and demand, characteristics of market behaviour, etc. Language structures analysis, as regimes of signification are imposed onto situations to help bring about order. These regimes of signification use pre-established language to bring order into a situation (Bosma, Chia and Fouweather, 2016). However, it is important to recognise the restrictions of language, including grammar, established laws and rules, and conventional codes that are usually part of the process of ordering and developing scenarios. Pre-ordering using such codes and bodies of knowledge limits the potential for creative and novel thought and expression, and its consequential impact to engender foresight. Regimes of signification will help managers to remain in their comfort zones, using the words that may not be relevant to their unfolding situation. How to counter the limitations of regimes of signification? The scenario approach is well established; however, the journey and outcome are unpredictable at the outset. The challenge of overcoming established assumptions and ways of working requires managers to welcome and develop an open-ended and exploratory approach. They should be willing to have their assumptions challenged. Managers should also embrace and absorb, not reject, contrary and third-party views and ideas. Different people, even within the same organisation, can look at a situation and see or not see possibilities; they can see the obvious or they can see the ‘hidden’ or invisible, as well as the improbable aspects of the situation. Doing so will help managers see beyond the obvious and entrenched views; it will help managers accept alternative and counter-intuitive explanations and understanding that bring a new, novel, and fresh understanding of the here-and-now. “Foresight is the philosophic power of understanding the complex flux of the varieties of human societies: for instance, the habit of noting varieties of demands on life, of serious purposes, of frivolous amusements. Such instinctive grasp of the relevant features of social currents is of supreme importance” (Whitehead, 1933, pp 119–120). “Foresight is an unspecialised aptitude for eliciting generalisations from particulars and for seeing the divergent illustrations of generalisations in diverse circumstances is required” (Whitehead, 1933, p 120). Creativity and reflexivity, where openness to emerging situations enables and encourages questioning and absorbing plurality of views and perspectives, occurs during temporary breakdowns, that is, moments of learning, insight, and reflection. Questioning and absorbing plurality of views and perspectives opens possibilities to see the previously unseen absence in events and experiences. Events, experiences, and ‘facts’ that are accepted “unproblematically to be fully constituted and self-identical in the immediacy of our experiences” are challenged (Chia and King, 1998, p 468). Socially and culturally situated language “privileges the immediacy and obviousness of observed phenomena” (Chia and King, 1998, p 469)

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based on accepted past practices. Meaning and understanding is not fixed and needs to be negotiated, from moment to moment, event to event, situation to situation. Take a simple statement: “I am hungry.” What meaning would you attribute to it? The person has not eaten for some time and is about to have a meal? The person who has no money to buy food? The person who is on a diet and is eating smaller portions creating hunger? Multiple interpretations can be made about the statement, and as soon as we take a fixed position, we immediately cut off other possibilities. If managers are seduced by the (seemingly) obvious interpretation of events and experiences, they are likely to miss the ‘otherness’ inherent in events and experiences. Biases and assumptions about ‘facts’ constrain managers from seeing what is unseen and imminent in events and experiences. Yet, creative and reflexive capabilities are within every manager and the scenario process provides a safe space for these to flourish. If managed well, the scenario process will open possibilities that were previously unseen.

Otherness The argument put forward for foresight focuses on the need to understand and search for “otherness always is already imminent in representational truth claims” (Chia and Nayak, 2017, p 125). The challenge is to look beyond the obvious explanation of events and experiences to identify alternative, unseen explanations and possibilities. Naming and categorisation of events and experiences are the first steps, which should be followed by asking, “What else could this be? What is hidden? How to bring to life the absent present, that is, the hidden imminent possibility?” Otherness is oblique and “points to potential meaning lying beyond or in-between concepts and categories” (p 138) that can be triggered through plurality of dialogue. The logic of false confidence in representation is derived from a “discrete, bounded, and self-identical and hence amenable to linguistic representation and logical manipulation” (p 127). However, the logic of representation is “inadequate at capturing the fluidity of our lived experiences” (Chia and Nayak, p 127). Given the constantly changing world “an alertness to otherness, and an awareness of temporality, transience and tendencies rather than fixed states” (p139) is the basis for foresight in the here-and-now with scenarios. What is required is a sensitivity to the emerging tendencies of lived experience, ‘the propensity of the moment’ (Jullien, 1999). Understanding ‘silent transformations’ (Jullien, 2011) and ‘otherness’ (Chia and Nayak, 2017) in scenario interventions requires a new way of understanding the role of scenarios, moving from the widely accepted rational analysis and reifying the scenarios themselves to understanding “how things gradually accrete, coalesce and become what they are is the focus of attention, not final, definitive states or ready-made categories of thought” (Chia and Nayak, 2017, p 141). Sensitivity to the ‘propensity of the moment’ (Jullien, 1999; Jullien, 2004) requires openness, creativity, and a willingness to look beyond the obvious in events and experiences.

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The inadequacy is explained by the absent ‘other’ in the process of representation. “Otherness is the unspoken, the absent” in any event or experience (Chia and Nayak, 2017, p 127). Events and experiences require further investigation and discussion to help reveal the invisible underlying generative sources of the events and experiences. Relational dialogue and exchanges provide the opportunity for individuals to listen, question, and seek out the non-obvious generative sources. In doing so it is possible to “accept and embrace the existence of opposites, contradictions and tensions” (Chia and Nayak, 2017, p 127). Such an approach is intended to overcome the IS/IS NOT classification of an event or experience, which hides the unseen but yet-to-be-revealed potential. The simple location representational approach to understanding organisation is based on an “ideally isolated system” (Whitehead, 1948, p 47), which implies that “things are said to be fully present, here in space and here in time” (Whitehead, 1948, p 50). Such an approach is dominant in most scenario planning publications through the focus scenario story-building rather than re-perceiving experiences.

Dialogue, Strategic Conversations, and Scenarios Strategic conversation first entered the scenario planning lexicon in 1996 with the publication of the book ‘Scenarios: The Art of Strategic Conversation’ (van der Heijden, 1996). van der Heijden (2005) recognised that “an effective strategic conversation must incorporate a wide range of initially unstructured thoughts and views, and out of this create shared interpretations of the world in which the majority of the individual insights can find a logical place. And it is only through embedding that joint action can result leading to new joint experiences and reinforcement of the shared theoriesin-use” (p 43). van der Heijden also recognised that the scenario process would utilise existing organisational language, recognising the dangers and limitations that this presented. He recognised the need for breakdowns to challenge historically held assumptions resulting in new experiential-based learning loops (Kolb, 1984) in an organisation. However, whilst ‘strategic conversation’ was pioneering and brought a new dimension to scenario planning van der Heijden recognised that it required subsequent theorising to gain wider theoretical and practice recognition. Several subsequent publications have explored strategic conversations, including ‘the relationship between scenario planning and perceptions of strategic conversation quality’ (Chermack, van der Merwe and Lynham, 2007) and ‘openness disposition and readiness that influence participant benefits from scenario planning as strategic conversation’ (Burt, Mackay, van der Heijden and Verheijdt, 2017). Burt and Nair (2020) identified that ‘unlearning’ was one aspect of creating foresight with the scenario process. “Unlearning requires letting go or relaxing the rigidities of previously held assumptions and beliefs, rather than forgetting them” (Burt and Nair, 2020). Doing so enables the previously unseen to be seen, the unthought to be thought, and novel insights to emerge from the familiar. However, there is limited theorising to underpin the impor-

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tance of strategic conversation and the link between the scenario planning process and unlearning and foresight. Communication constitutive of organisation (Reed, 2010; Cooren, Kuhn, Cornelissen, and Clark, 2011; Vaara and Fritsch, 2021) is one possibility to fill this gap. Communication constitutive of organisation is a constructionist approach that recognises that “organizations are constituted in and through human communication” (Cooren, Kuhn, Cornelissen, and Clark, 2011, p1149). Such an approach is coherent and consistent with Whitehead’s challenging idea of ‘simple location’, where “organizations can no longer be seen as objects, entities, or ‘social facts’ inside of which communication occurs. Organizations are portrayed, instead, as ongoing and precarious accomplishments realized, experienced, and identified primarily, if not exclusively, in communication” (Cooren, Kuhn, Cornelissen, and Clark, 2011, p 1149). This is an important definition as it identifies (i) socially negotiated order through talk, (ii) that (organisational) boundaries are non-existent, and (iii) the flux and flow of lived experience in an ever-changing world. Communication constitutive of organisation provides the theoretical rationale for scenarios as strategic conversation, as “communication is seen as the ongoing, dynamic, interactive process of manipulating symbols toward the creation, maintenance, destruction, and/or transformation of meanings which are axial, not peripheral, to organizational existence and organizing phenomena” (Ashcraft, Kuhn, Cooren, 2009, p 22).

Building the Rationale for Scenarios as Strategic Conversations Chia and Nayak (2017) argue that “our socio-linguistic acts of naming, categorising, conceptualising, and indeed our material organizing actions and practices are practical ways of arresting, fixing, and stabilising this ephemeral reality in order to facilitate social and economic exchange and productive action. Language and logic are therefore vital instruments for the human species; practical ‘tools’ for dealing with an otherwise intractable and indeed unliveable reality. Workability, not representational truth claims, therefore, is the real object of using language and logic” (p 134). The scenario planning process is about “extracting sense and developing meaning from it” (p 134). Understanding the scenario process as ‘strategic conversation’ opens new and previously unrecognised and underdeveloped opportunities for the creation of foresight. However, recognising the primacy of movement and process over static entities and permanence has important implications for the scenario planning process, theory, and foresightful outcomes. Recognising process and movement as key “involves the continual building up and breaking down of actualised ‘entities’ through the assembling, disassembling, and reassembling of past events into ever newer entitative configurations in an interminable process of becoming. It involves change, reconfiguration, and novel re-creation, always dismissing the old and replacing it with the new” (Chia, 1997, p 77). This has significant implications for scenario projects and the scenario process, for practitioners and for facilitators, and for academics.

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First, process challenges the notion of scenario end states. Scenario end states depict plausible alternative futures, based on a linear causality that links the past to the present to a plausible future. From the set of plausible futures (i.e., scenario end states) there is a search for ‘strategies’ that will be robust no matter what future the organisation meets. From a process perspective, scenarios are designed to help understand what is imminent, “revealing the latent and the unrealised in oneself and one’s world” in the here-and-now (Chia, 1997, p 80). However, scenarios have a widely accepted representationalist methodology (Wack, 1985a; 1985b; Burt, 2007) rather than an underpinning based on enactment and socially negotiated order of lived experiences (Eden, 1992), which helps the understanding of events and experiences in the here-and-now. Scenario end states are transitory devices; it is the totality of the set of scenarios where meaning, understanding, and foresight emerge. Second, process challenges the notion of the future, and managerial actions. Scenarios traditionally develop projected plausible futures as the basis of future action. Process thinking changes the understanding of the outcomes of the scenario process. Whilst the product of a scenario project will be a set of scenarios, the intervening participant interactions resulting in a deeper understanding of the past and how it is emerging in the present is paramount. It is argued that these exchanges and the emerging, imminent insights are the basis of re-perceiving and reframing managerial understanding and knowledge (Wack, 1985a; 1985b; Tsoukas, 2009). Scenario stories and the related storyboards subsequently become artefacts of the exchanges, dialogue, and strategic conversations as re-perceiving is the key outcome and barometer of success of the scenario process. Third, process challenges the linear notion of time (and the past). Scenarios traditionally consider time as chronological, with the scenario end states mapping a linear pathway from the (settled) past, current understanding of the present to a plausible future. However, the participants in their interactions discuss events and experiences without noting them in any chronological order. They make novel connections between these events and experiences, not based on time sequencing but on an “intuitive knowing” basis (Chia, p 81) that deconstructs and reconstructs their interpretation and understanding of events and experiences in the here-and-now. Fourth, process raises questions about the restrictions of language. Signs, referents, language – regimes of signification – can hide the hidden and latency of lived experiences. These regimes of signification constrain creativity and reinforce a bounded and business-as-usual mindset. The well-established and situated meaning structures constrain conversations in two ways. First, they are embodied with culturally situated understanding, which bounds thinking. Second, although culturally situated, diversity of understanding in such language can emerge and not be evident to individuals, as its meaning is likely to be taken for granted. Scenarios as strategic conversation is a “creative linguistic intervention in dialogue, opening up semantic spaces whereby new terms are coined and old ones broken up, combined, and/or redeployed in novel ways, in an effort to give expression to the fresh circumstances experienced or new phenomena ob-

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served” (Bosma, Chia and Fouweather, 2016, p 14). As new and novel interpretations of events and experiences emerge, language can be interpreted and re-interpreted in new ways to build unequivocal consensus and re-perceiving.

Short Case Study Consolidating Chapter Discussion The scenario project discussed here was sponsored by the Confederation of Forest Industries (CONFOR) entitled, ’The opportunities and challenges for mixed woodland in Scotland to create wide ranging benefits including contributions to climate change targets: An initial exploration’. CONFOR invited representatives from a wide stakeholder base, including commercial organisations Egger Sawmills, James Jones Sawmills, and Tilhill Forestry; public policy and local government organisations including the Scottish Government, Forestry Commission Scotland, Forestry Enterprise Scotland, Scottish Natural Heritage, Scottish Woodlands, and Stirling Council; the regulator Scottish Environment Protection Agency (SEPA); and industry bodies Scottish Timber Transport Forum and National Farmers Union (NFU) Scotland (Burt, Mackay and Mendibil, 2021). The participants agreed on the core question: “What are the key barriers that need to be overcome for the forestry and timber industry to make a significant contribution to Scotland’s achievement of Sustainable Development Goal (SDG) 13 (Take urgent action to combat climate change and its impacts)?” The principal challenges embodied within this question included: (i) finding ways to increase the added value activities across the forestry/timber extended value chain; (ii) identifying issues that impact/block achievement of SDG 13 across the forestry/timber extended value chain; (iii) opportunities and constraints to new planting to meet and beat Scottish Government planting targets (initially set at 10,000 hectares per annum); (iv) understanding the implications and responsibilities of moving from a policy and regulation landscape that is incoherent to a coherent and “joined up” landscape where there are common or shared narratives and everyone is pulling in the same direction across industry and Government; and (v) exploring whether the use of timber in building can be embedded in wider CO2 targets on a par with tree planting.

Project Context and Challenges The key challenges that enabled the multi-stakeholder scenario project to happen were based around failure to meet policy targets with regards to the reduction of CO2 emissions and failure of tree planting targets. The Climate Change (Scotland) Act 2009 set out longterm policy targets to reduce greenhouse gas emissions by 80% by 2050 (relative to 1990 levels). The policy target failed to meet its greenhouse gas reduction targets in the period

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2010 to 2014. They set an interim target to reduce emissions by 42% in 2020. Although gross Scottish emissions fell nearly 30% it was recognised that change was needed. The Scottish Government set a target of new tree planting of 10,000 hectares of new woodland per year, with a target to plant 100,000 hectares by 2022 (Scottish Government, 2013; Scottish Government, 2014). This target was revised in 2016 to 12,000 hectares per annum, rising to 15,000 hectares to meet a new target of 33 million new trees planted by 2024/25. Although new tree planting occurred during the COVID pandemic it still failed to meet annual planting targets. In 2021 the target was revised to 18,000 hectares a year by 2024/25. Change in target planting is indicative of policy failure. A short summary of the four scenarios developed by the participants: Scenario 1: Sustainable and Integrated Forest Management This scenario depicts a future where a wide range of political, socio-ecological, and economic benefits are achieved. Government understands the competing tensions between policy, socio-ecological, and commercial objectives and establishes and implements a framework with financial incentives and support mechanisms to provide a roadmap that satisfies all stakeholders. Government, local and public sector government, and private sector work together to achieve the longer-term policy and commercial objectives. Scenario 2: Clear conscience but lighter wallet This scenario depicts a situation where there is an imbalance between political, socioecological, and economic objectives. Government land use policy ignores economic sustainability and incentivises disproportionately public benefits, resulting in incremental year-on-year decline in woodlands and new tree planting. To ensure timber is available to support commercial building and construction, more timber is imported. Eventually there is a tipping point from where there is widespread recognition that good intentions produce poor outcomes. Scenario 3: We didn’t see that coming This scenario depicts a situation where technological innovation with 3D printing becomes a competitor to forestry and trees. A general decline in economic conditions results in fewer incentives for new tree planting. Traditional farming dominates agriculture, with a reluctance to plant trees on farming land. To compound matters, new tree planting is focused on biodiversity at the expense of trees for commercial activities. Scenario 4: Where have all the trees gone? This scenario starts with a recognition of the attempts to reconcile state and local government policy objectives with commercial needs. However, over time these positive steps reverse. Leadership across all stakeholders becomes fragmented and policy objectives of annual planting targets fall further and further behind. A vicious circle emerges

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with policy disconnected from land use and commercial needs. Eventually there is a recognition of unrealised potential of forestry for public goods, timber becomes unsustainable as an investment, and forestry resources decline.

Review of and Insights Arising During Scenario Presentations The set of scenarios presented above depict a spectrum of futures from achieving aspirational policy and commercial intentions through to failure in woodlands and forestry policy, with the knock-on impact on the timber industry. Scenario 1 is the ‘surprise-free’ scenario. The extent of fragmentation between policy, commercial practice, and landowners/farmers due to conflicting aims and priorities became evident to all participants during the scenario presentations. It was significantly worse than they had previously believed. Interestingly, it was during the presentation of scenario 4 where participant creative insights emerged, in the here-and-now, that helped re-perceive the extent of the real and present threat of policy and commercial failure. The case study is one example of foresight emerging from relational dialogue and strategic conversation with scenarios. Some participant comments about the extent of the situation included: “There are negative perceptions of forestry at both state and local government, including the Government regulatory burden; and the lack of government financial incentives to encourage forestry and woodland investment”. “It is a complex and competing landscape between public benefits and commercial interests; the focus is on short-term political timescales, yet forestry and woodlands require a long-term vision”. Adding, “It takes a crisis to get someone to take notice, and that’s a shame”.

The insights are summarised by one participant: The policy disconnect between agencies, inertia in the system, land use strategy not fit for purpose in terms of delivering forestry targets, skills shortages in the sector, even a decline in rural population, resulting in unrealised potential of forestry for public goods, and timber unsustainable as investment in forestry resource declines. This results in a growth in imports, depending on how the pound does in relation to foreign currency, which would impact for demand for Scottish timber.

Summing up the insights from the presentations one participant noted that: We are the problem; we are the solution.

Impact of the Scenario Project Prior to the scenario project there was a cross-stakeholder recognition of the challenge, and the wide range of benefits, of woodlands and trees. Government redefined planting targets masked the extent of the unfolding situation. However, it became ob-

Setting the Objectives of the Book

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vious to all participants that the situation was more complex than they perceived. Whilst moving annual planting targets gave the impression that policy objectives would eventually be achieved, the ‘hidden’ or ‘absent’ aspect was the recognition that all stakeholders were complicit in the unfolding situation, which would worsen if they continued in the business-as-usual ways of working. Moving the annual policy planting targets masked the ‘otherness’ of the situation. The scenarios acted as a platform, or a bridge, for pluralistic, multi-vocal, and polyphonic voices, as well as for opposing views to be surfaced, discussed, and negotiated. Doing so enabled the participants to understand the ‘propensity of the moment’ and the ‘immanent’ policy and commercial failure. The scenario process created the reflexive safe space for participant questioning of their assumptions. The scenarios ultimately became an artefact of their reflexive conversations. Insights from the strategic conversation enabled participants to summarise the way forward built around: “Climate change as the issue we can all work around, that then brings the various sectors together; we are then able to think about communication, eco-systems services which leads to the positive outcome for policy and commercial interests, avoiding this kind of fragmentation and failure to communicate”.

Setting the Objectives of the Book The objectives of the book are threefold. First, to open new possibilities for scenarios in practice. To do so will require (i) exploration of the evolution on the role of scenario planning to help organisations make sense of their changing world, (ii) encouraging more managers and more organisations to engage with scenarios as a central element of their strategising, whether on a regular basis or on an infrequent basis, (iii) embracing the constantly changing world and understanding how to maximise strategising to safeguard, protect, and strengthen the organisation over time, and (iv) understanding the process of redefining and reframing the organisation and aiding its ongoing evolution. Second, to expand the theoretical foundation of scenarios as strategic conversation to underpin foresight in the here-and–now. Third, to reveal and discuss the latent skills and capabilities within individuals that occur during strategic conversations with scenarios where ambiguity is a natural feature of such strategic conversations. These skills and capabilities are built around an openness disposition; intentional patience; an ability to absorb multiple ideas, interpretations, and explanations (which may be contradictory); and an ability to wait for a moment of clarity where insights emerge and guide future actions.

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Chapter 2 Genealogy and Evolution of Scenario Planning The range of what we think and do is limited by what we fail to notice. And because we fail to notice there is little we can do to change until we notice how failing to notice shapes our thoughts and deeds. RD Laing

Introduction The above quote highlights both the problem of individual (and organisational) rigidity in thinking and the solution to overcoming rigidity and making sense of the changing world. Scenario planning is a long-established and proven approach to help individuals and organisations generate novel insights about their world that were previously not recognised, which subsequently influence future actions. In this chapter we trace the origins and evolution of scenario planning, from the early/mid-1900s through to the second decade of 2000. In doing so it is important to recognise that there are two main and contrasting foundations to the development and application of thinking with scenarios. One is more intuitive and exploratory based, whilst supported by quantitative modelling (Kahn and Weiner, 1967; Wack, 1985a; Wack, 1985b; Cornelius, Van de Putte and Romani, 2005; Jefferson, 2012); the other is more goal or aspiration oriented and focused where the desired future is set out, again supported by quantitative modelling. From such an understanding, individuals and/or collectives/management teams identify the actions needed to be taken to achieve a desirable future (Berger, 1957; Godet, 1986). In both approaches the thinking, methods, and application have evolved over time, with a variety of branching points creating new possibilities in the theory and the practical application of the scenario process. No matter which approach is adopted in practice they share a common theme. That common theme is to challenge the limitations of individual and collective thinking, to create space for creativity and innovation. Such creativity and innovation are at the heart of learning, unlearning, and foresight (Burt and Nair, 2020). So, what is foresight? “Foresight entails the unique capacity to grasp instinctively the relevant features of social currents and illicit generalisations from particulars as well as for seeing the divergent illustration of generalities in diverse circumstances” (Whitehead, 1933, p 120). The changing world does not emerge and present itself in neat and structured ways. Events and experiences emerge and disappear. Events and experiences emerge and may not be noticed and/or ignored. Events and experiences emerge, are noticed, and are considered irrelevant. Events and experiences emerge, are noticed, and are explored, made sense of, and understood. In addition, events can occur in different times and spaces and may or may not be taken into consideration (Wack, 1985a; 1985b).

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The challenge is to make creative and novel sense of such events and experiences, to importantly generate insights. Insights may be alternative explanations of events and experiences; insights may be counter-intuitive explanations of events and experiences; insights may be about hidden motivations of stakeholders; insights may be about the reinterpretation of seemingly familiar events and experiences. Insights are the basis of developing appropriate foresight, and subsequent strategic responses as part of the ongoing basis of organising. Strategic conversations with scenarios are recognised as the basis of foresight; however, the process is under-developed (Ringland, 2010; Sarpong and Maclean, 2016; Burt and Nair, 2022). Insights that engender foresight are therefore a creative and reflexive process that is based on challenging assumptions, questioning perceptions, assessing and (re-)evaluating experiences, past and present, and by doing so opening up novel understanding and new possibilities in the here-and-now. Foresight enables the familiar to be questioned and challenged and enables the familiar to be seen in a new light. Foresight enables the unseen to be seen and understood. Foresight leads to revelations that simultaneously surprise and create insights that were not previously considered and reflect the imminent emerging present. As we will explore and discuss throughout the book, creativity and novelty are at the heart of the scenario process. When successful the process will help individuals and collectives to foresee insights about their unfolding context. Foresight is at the heart of the quote at the outset of this chapter. Ronald David Laing was a Scottish psychiatrist, who also studied philosophy, worked for a number of years at the Tavistock Institute, and was associated with key individuals who studied the psychology of child education. Laing viewed psychiatry as a transformative space to help an individual reflect, generate personal insights, releasing potential, and be more able to understand the limitations of their prior experiences to become more ‘in tune’ with themselves and the world. Individuals and collectives (i.e., management teams) tend to get locked into a set of assumptions and beliefs, based on past experiences and successes, possibly ignoring mistakes and failures, and these assumptions and beliefs underpin their decisionmaking process. If managers are unaware of what they do not know, no matter if these knowledge gaps are local or global, these are likely to impact organisational performance and success in the future. If managers are unaware of the limitations of their assumptions and beliefs, they will continue with actions from the past into the future, and the developments in the changing world will remain unseen. The parallels with RD Laing’s assertion were evident in chapter 1, will be evident in the discussion on the role and evolution of scenario planning, and will also be evident in subsequent chapters when we explore several case studies in detail. The key is to reduce failing to notice, improving what we notice, not just trying harder to notice more.

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Genealogy and Foundations of Scenario Planning In this section we will explore the foundations of contemporary scenario planning and subsequently how it has evolved over the last three decades. Whilst foresight has a long-established history, dating to the philosophic thoughts of Heraclitus, who argued that the world was in flux and constantly changing and evolving, and he was concerned about human blindness as to what was happening, and is just as relevant today. Heraclitus was alerting society to its limitations and encouraging the ability to engage and understand how the world was evolving. Heraclitus was also encouraging society to understand that change was constant, and that transformation and renewal were essential elements of the world. Stability is transitory in nature. Whilst it is difficult to fundamentally anchor foresight in Heraclitus’ thinking, we can detect the implications of his thinking to understand how ‘fore’ – before something happens – and ‘sight’ – perceive and see – create the word foresight as the capability to detect what has happened and is happening, in the here-and-now, before events manifest and use foresightful knowledge to overcome human blindness.

Historical Foundations of Scenarios and Foresight (1) – American Military The first historical perspective on scenarios and foresight can be traced to the American military post World War 2, with the commissioning of Project RAND in 1946, when the Douglas Aircraft Company’s engineering division undertook a study and published a report (SM-11827) entitled ‘Preliminary Design of an Experimental WorldCircling Spaceship’, May 2, 1946 (RAND Corporation). It set out the engineering feasibility of developing a spacecraft to orbit earth. Several years later the RAND Corporation was established to develop military research and thinking. The intention was to integrate military thinking with science and industry. However, in 1948, RAND Corporation was established as a non-profit organisation to encourage “out-of-the-box thinking” or daring to think imaginatively (Project Air Force 50th, 1996, p 11) using a combination of systems analysis, social policy analysis, and game theory. Subsequent publications included “The Operational Code for the Politburo” (Nathan Leites, RAND Corporation 1950) to understand the foundations of Soviet political thinking, and in 1964 the “RAND Tablet: A man-machine graphical communication device” (MR Davis and TO Ellie, RAND Corporation Report SM-11827, May 1946) as evidence of the boundary-pushing nature of innovative and speculative thinking that laid the foundations for scenario planning. A key member of the RAND Corporation at the time was Herman Kahn. Kahn together with Irwin Mann developed a range of publications that would be instrumental at the time in shaping thinking about scenario planning and related supporting techniques. Some examples include: Techniques of systems analysis (Memorandum RM-

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1829-1-PR, June 1957); Ten common pitfalls (Memorandum RM-1937, Astia Document Number AD 133035, July 1957); and War Gaming (Report P-1167, July 1957). Kahn himself also developed and authored a number of publications, including: The nature and feasibility of war and deterrence (Report P-1888-RC, January 1960) and Modification of the Monte Carlo (Report P-132, 1959) which highlights the role of statistical and stochastic modelling approaches that were predominately used at that time. Herman Kahn left the RAND Corporation in 1961 and founded the Hudson Institute with (former RAND colleagues) Max Singer and Oscar M Ruebhausen, which was also a not-for-profit organisation. Kahn wrote his first book, On Thermonuclear War, in 1960, which explored the role of nuclear power, for domestic and military use. In the book the central idea of mutual annihilation was developed whereby two nuclear powers deploying nuclear weapons would obliterate each other. The argument then evolved to surface the idea of a non-aggression pact to prevent nuclear war. Eight phases of nuclear war were set out to help policy makers understand the impact and consequences for society and the economy. Within the arguments Kahn uses game theory to set out a number of scenarios based on the US response to the Soviet suppression of the Hungarian revolt. If the US responded, the Soviet Union could (i) do nothing with wider Soviet geopolitical consequences, (ii) respond with limited military response, again with wider Soviet geopolitical consequences, and (iii) launch an all-out first nuclear strike, which would have devastating effects for all involved. Such ideas were designed to challenge policy makers, including the US President, to contemplate the future, as well as their Soviet counterparts, and consider suicide – mutual annihilation. Pickett (1992) noted that “to Kahn, normal academic credentials were far less important than real knowledge and the ability to look at issues in unusual ways” (p 7). Such a criterion is still woven into contemporary scenario projects. In 1962 Kahn developed the 16-step ladder of escalation setting out a number of phases and responses that could occur with the threat of thermonuclear war. Kahn evolved this in 1965 into a 44-step ladder of escalation, adding new actions that could be taken. Each of these can be seen as ‘mini’ scenarios designed to challenge and unsettle conventional (policy) thinking. The principle was to challenge, overcome, and remove barriers to thinking about difficult subjects. In ‘Thinking About the Unthinkable’ (1962) Kahn initially set out to advocate for the removal of barriers to thinking about either taboo subjects or areas of social inhibitions, or complex issues to ensure that society, policy makers, and decision makers have the confidence to discuss such challenging concerns. Kahn was a scientist and was influenced by his spell in Burma with the US military as a telephone linesman, and it was here that he realised that the army did not understand anthropology. The army focused on weapons and fighting; they did not focus on understanding the mindset of the people that they were fighting. From the experience in Burma, Kahn understood the role of ‘outside voices’ in extending thinking.

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With Anthony Weiner, Kahn published “The Year 2000: A framework for speculation on the next thirty-three years” (1967), which could be regarded as the seminal moment in long-term scenario planning. However, it was in the book ‘Thinking About the Unthinkable’ (1962) that an early definition of a ’scenario’ was set out: A scenario results from an attempt to describe in more or less detail some hypothetical sequence of events. Scenarios can emphasize different aspects of ‘future history’ . . . . . . The scenario is particularly suited to dealing with several aspects of a problem more or less simultaneously. By the use of a relatively extensive scenario, the analyst may be able to get a feel for events and the branching points dependent upon critical choices. These branches can then be explored more or less systematically. The scenario is an aid to the imagination (p 143).

There are several important points to note in these words. First, ‘hypothetical’ highlighting the speculative nature of scenario thinking (as set out by Kahn and Weiner, 1967). Second, developing a ‘future history’ resulting in a longer-term view of time in the imagined future – the chronological ordering of the ‘future history’. Third, events and branching points which would be used to develop pathways to alternative futures, from which potential decisions could be considered and analysed. These three important points were fundamental to the subsequent development of scenario planning in business (Wack, 1985a; 1985b). In the context of this book, these ideas, whilst important, will be challenged as part of developing an understanding of scenarios as strategic conversation with a focus on talk and dialogue, which will offer a new perspective of scenarios as creating foresight in the here-and-now.

Historical Foundations of Scenarios and Foresight (2) – French Tradition The second historical perspective on scenarios and foresight can be traced to Gaston Berger and the idea of ‘La Prospective’. Berger, who in his career combined working in industry and academia as a philosopher, was key to the establishment of the “Centre International de Prospective”, created in 1957; slightly later, the “International Committee Futuribles” was founded in 1960 by Bertrand de Jouvenel (1960). Both Berger and de Jouvenel considered that the past was fixed and that the future should be the focal point of any planning activity, and as the future was not made actions taken could result in the desired future. In developing the rationale of La Prospective Chatel and de Jouvenel (1973) advocated for multi-disciplinary input into future studies. Chatel and de Jouvenel state, “the basic goal of prospective is the fulfilment of man and his creative role in his relationship with society. Futuribles defines as its purpose the promotion and the application of research in the social sciences and to explore the ‘possible futures’. Its ambition is to work toward the gradual establishment of a permanent discussion of the future, by giving advance no-

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tice of unfavourable and favourable potentialities; this might contribute to divert policies from dangerous paths and guide them into the more promising ones” (p 271). Godet (2010) in describing la prospective stated that “it is closer to strategic foresight . . . . La prospective attitude does not wait for change and then react; it aims to master expected change (preactivitiy) and to induce a desired change (proactivity)” (p 1457). In elaborating further Godet stated that “la prospective is less interested in futuribles (possible futures) than futurables (desirable futures)” (p 1458). These desirable futures are grounded in available data, stakeholder interests, and common goals to be achieved in the future. Actions are set out to achieve these desirable futures. Navigation is towards the achievement of these desirable futures. Godet (1986) set out a detailed discussion of the La Prospective approach, starting with structural analysis using the microscopic-macroscopic (MICMAC) approach which identifies variables of interest and models the relationships and reactions between key variables. A matrix mapping out all the relationships is developed and, from this, the nature and impact of the relationship identified. The relationships could be amplifying (growth) or regulating (equilibrium) the interaction between the variables. Quantitative values are then attributed to the relationships, and systems analysis and decision trees are used to develop cross-impact analysis of the model. Models developed under this approach are then considered ‘probable’ scenarios (Godet, 1986). Both approaches to scenario planning were beginning to be widely adopted in the late 1960s and early 1970s as an increasing recognition of the limitations of forecasting. Forecasting at the time was predominately based on stable assumptions that underpinned prior forecasts and plans. However, as we will discuss below certain events and incidents occurred that resulted in greater contextual uncertainty which called into question the legitimacy of forecasting and organisational planning processes and practices. Predictions and forecasts were considered increasingly unreliable given unexpected ‘shocks’, and organisations searched for methods to help them explore uncertainty as part of their planning activity. By doing so the intention was to reduce risk in decision-making and strategic investments.

Uncertainty in the Contextual Environment Uncertainty in the contextual environment emerged as a key factor for businesses in the 1960s. An early seminal attempt to help businesses understand the nature of the contextual environment was developed by Emery and Trist (1965), based on an open-systems approach. Open-systems approach is about the human and socio-ecology being in harmony, where change and innovation optimises the ongoing nature of the relationship for humans. Emery and Trist (1965) described an organisation’s environment as a “causal texture as the area of interdependencies that belong within the environment itself” that covers “the area of internal interdependencies and exchanges between the organization and its environment, the area of transactional interdependencies” (p 22),

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highlighting the need to understand interrelationships and connections in the stakeholder environment as well as non-controllable factors beyond the stakeholder environment. Emery and Trist developed four types of causal textures: (i) the placid randomised environment where the environment is relatively calm and stable over time with limited competitive pressures; (ii) the placid clustered environment where it is relatively calm and possible for an organisation to distinguish from others in its immediate environment; (iii) the disturbed-reactive environment, composed of other similar organisations that inhabit the environment and are equally balanced and in which actions of one organisation have direct consequences for the other similar organisations; and (iv) the turbulent environment where interactions between incumbent organisations as well as factors beyond their control combine to create a dynamic and unpredictable environment. In subsequent conceptualisation of the nature of contextual uncertainty Duncan (1972) identified two key dimensions to help organisations understand their context – simple/complex and static/dynamic. The first dimension’s simple/complex “deals with the degree to which the factors in the decision unit’s environment are few in number and are similar to one another in that they are located in a few components. The complex phase indicates that the factors in the decision unit’s environment are large in number” (p 315). The second dimension’s static/dynamic “indicates the degree to which the factors of the decision unit’s internal and external remain basically the same or are in a process of continual change” (p 318). The dynamic aspect relates to the “frequency with which decision unit members take into consideration new and different internal and/or external factors in the decision-making process” (p 319). Lawrence and Lorsch (1967) stated that uncertainty consists of three components: “(1) the lack of clarity of information, (2) the long-time span of definitive feedback, and (3) the general uncertainty of causal relationships” (p 27). The first component arises from the infinite amount of potentially available information, which will be unstructured, vague, ambiguous, and open to a wide range of interpretations. The second component is even more problematic as many managers perceive that the past is fixed and settled rather than being open to interpretation and reinterpretation (in the here-andnow). The focus is on trying to understand some future time period, for example, the next three years, or the next five years, or the next ten years, dependent on the nature of the business. The third component is the most problematic as there are no hard-andfast or established rules to determine causal relationships. There are too many factors in determining causality. For example, when the archer’s arrow leaves the bow what happens prior to it hitting the target? One additional contributary factor to understanding the relationship between organisation and the contextual environment that is widely held, but receives limited explicit acknowledgement, is the cartesian dualism theory of the relationship. The organisation/ contextual environment separation reifies the manager as a voyeur looking out to the ‘environmental landscape’. Two important issues arise as a consequence of such voyeurism. First, the manager is likely to be passive and reactive to engaging with his/her changing ‘landscape’. Second, the manager will likely undertake some investigation and

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analysis of the changing situation when ’pain’ passes a certain threshold. Furthermore, a voyeurism approach is based on a stable world, and fixable in space and time that is represented by symbols, words, and concepts. No matter which description or representation is considered when thinking about the organisation-contextual environment relationship they fail to be helpful as they are descriptions ‘after the event’. If flow, flux, and change is a natural feature of the world, it will not help a management team if one manager comments, ‘We are in a turbulent environment’, rather than investing time to make sense of and identify the potential sources of turbulence prior to the experience of turbulence. A change in mindset and approach is required. The key is to take the bland, undifferentiated, or familiar and draw out distinctions of events and experiences that are novel, unique, and relevant to the situation under consideration (Zundel, Cour and Lauritzen 2021). Being proactive and innovative in the process of ongoing making sense of the changing world is the essence of foresight. The scenario process is designed to help a management team engage with their changing context to generate foresight. Making sense of events and experiences is a matter of individuals and collectives being creative and explaining to each other how they make novel connections between events and/or experiences that bring new and relevant insights. In articulating such connections, the individual speaking and those listening are using common sense, practical experience, established laws, and novel connections to make sense of their experiences. There are no definitive rules of causal reasoning, which is the essence of socially negotiated order, which is a theme that will be developed in the book. Building socially negotiated order and consensus about the nature and impact of the changing world is a key requirement to ensure the success and sustainability of any organisation. One framework that is useful in understanding socially negotiated order is Vickers’ (1995) ‘Appreciative System’. There are three elements to the Appreciative System, (i) reality judgment, i.e., making sense of the changing world, (ii) value judgments in determining relevance or non-relevance of the focus of reality judgments, and (iii) instrumental judgments in determining what actions should be taken in the future. Element one, reality judgments, is about “surfacing, sharing and challenging perceptions of the changing world. Such a process requires structuring and restructuring of perceptions, based on negotiation and agreement of meaning, and alignment or accommodation of diverse views” (Burt and van de Heijden, 2008, p 1112). Sense-making is an iterative process of social interaction between members of the organization (Eden, 1982, 1992; Weick, 1979; Vickers, 1995) where they share their understandings of the past, its significance in the present, and the implications for the future, “bringing about mutual accommodation in their understanding” (Burt and van der Heijden, 2008, p. 1113). Element two, value judgments, is related to reality judgments, in that the process of sensemaking should “create sufficient alignment and accommodation between managers on the major challenges facing their organization” (Burt and van der Heijden, 2008, p 1114).

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Element three, instrumental judgments, is about an individual and/or the collective/management team defining and redefining the unsettling situation and reframing the basis of organising in the changing world. All three elements are intimately and implicitly connected, with conversations, dialogues, and exchanges between the collective/management team, during the scenario process, providing the space and platform to move from a situation of equivocality to unequivocality about the changing world. This process will be revisited throughout the book as it is central to understanding scenarios, the art of strategic conversation, and foresight in the here-and-now. However, the next step is to map out and understand the evolution of thinking about scenario planning. There have been multiple claims about confusion surrounding the scenario process. So, is it about separation between organisations and their environment? Or is it about ongoing creative world-making? “A representationalist worldview thus ensues, in which signs and linguistic terms are taken to accurately represent an external world of discrete and identifiable objects and phenomena” (Chia, 2002, p 5). However, the adage – the map is not the territory (Weick, 1979) – highlights that no matter what ‘map’ the manager creates it will be incomplete. It may be helpful; it may not be helpful. By considering the evolution of scenario planning the intention is to clarify its application in practice as well as its theoretical underpinning.

Evolution of Thinking About Scenario Planning In this section we explore the evolution of scenario planning over 60 years, from Herman Kahn and colleagues in the 1960s, defined as ‘scenarios as speculative imagination’, to Shell and many other organisations in the 1970s, 1980s, and 1990s, defined as ‘scenarios as exploring and mapping socio-macroeconomic systems’, to van der Heijden and the idea of scenarios as strategic conversation (1996/2005) from late 1990s/ early 2000s to date.

Scenarios as Speculative Imagination Scenarios as speculative imagination are grounded in the work of Herman Kahn and his colleagues at the RAND Corporation and the Hudson Institute. For example, in the book ‘Thinking About the Unthinkable’ (1962) Herman Kahn sets out four possible “sizes and shapes of thermonuclear war – first, inadvertent war; second, war as a result of miscalculation; third, calculated war; and fourth, catalytic war” (p 40). These sizes and shapes of thermonuclear war are scenarios exploring how war might come about. In the first ‘scenario’ war might start unintentionally, occurring from a range of possibilities including mechanical or human error to false alarm to a self-fulfilling prophecy to unauthorised behaviour. By developing a range of possibili-

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ties Kahn was helping military planners and policy makers confront uncomfortable situations that might happen in the future. In the second ‘scenario’ protagonists have had commitments which may be hard to back down. As more commitments are made one of the protagonists makes the decision that they are in a worsening position and makes a (miscalculated) first move. In the third ‘scenario’ one of the protagonists, in an escalating confrontation, believes that they will lose and as a consequence undertakes a decisive move to ‘win’. In the fourth ‘scenario’ a third-party country may orchestrate tension between two protagonists on the bases that they will destroy each other. Kahn then states, “to the extent that scenarios may be divorced from reality, this again seems a criticism more apt for particular scenarios than the methodology. If a scenario is to be plausible, it must, of course relate at the outset to some reasonable version of the present and must throughout relate rationally to the way people could behave though it is important not to limit oneself to the most plausible, conventional or probable situations and behaviour” (p 145). Kahn is clearly setting out to stretch individual and collective thinking, opening up possibilities that may be difficult to consider. However, two important points can be highlighted from the above discussion that are relevant to the argument put forward in this book. First is the separation between ‘scenario thinker’ and their ‘context’. Separation ultimately leads to a situation where, considering Kahn’s approach, ‘we win/you lose’. Binary thinking is problematic as no matter the outcome the world continues onward. As we progress through this chapter this will be a common theme surrounding the evolution of understanding about scenarios and scenario planning. Second is the requirement to ground scenarios in the current situation; otherwise they will not be considered plausible. Subsequent decisions and actions then create a new momentum. However, as the past is not fixed it is open to (continual) interpretation and reinterpretation as events, seen and unseen, come into view and are related to other events to bring about new and fresh interpretation, new patterns, and understanding of the unfolding situation. The argument being put forward in the book, with scenarios as strategic conversation, is about making sense of the changing world through dialogue in the here-and-now.

Scenarios as Exploring and Mapping Socio–Macroeconomic Systems In the 1960s, whilst the USA and USSR were stuck in the ‘Cold War’ the USA was also embroiled in the Vietnam War; the world was up to that time in a relatively stable period economically. However, in the early 1970s this period of economic stability was turned on its head. First, the Yom Kippur War in October 1973, when Arab forces invaded Israel, triggered a dramatic rise in the price of oil. In 1970 oil was traded at US$3.39 per barrel; in 1972 oil was traded at US$3.60 per barrel, an increase of 6%. However, in 1974 oil was traded at US$9.75 per barrel, an increase of 190%. Economic shockwaves were felt globally. In addition, the Organization of the Petroleum Export-

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ing Countries (OPEC) imposed an oil embargo on the USA for its support of Israel. Second, in 1979 the Iranian Revolution and the overthrow of the Shah of Iran, known as the second oil shock, resulted in a reduction in the production of oil. In 1979 oil was traded at US$25.10 per barrel and in 1980 oil was traded at US$37.42 per barrel, an increase of 640% and 1000%, respectively, in comparison with 1970 oil prices. Interestingly, in France, for instance, in 1972 decisions on energy were based on forecasts of a continuation of the trend of stable or decreasing oil prices until 1980–1985 (Godet, 1986, p 134). As such, forecasting and planning based on prior assumptions were increasingly recognised as deeply flawed. This was the situation within Shell and their ‘Unified Planning Mechanism’ which was the guide for all business plans in Shell at the time. Interestingly, Pierre Wack, who is recognised as driving the application of scenario planning in Shell, started his career as an economic forecaster. The search was on for an alternative approach to help overcome the limitations of forecasting. Wack intuitively recognised the limitations of a bounded oil-industry mindset that limited the view of the changing world. Prior to the late 1960s/early 1970s the external environment for oil companies, and many other companies experienced stable conditions which reinforced forecasting as the basis of business planning. However, there was a concern that the future would change, and that Shell needed to be ready for such change (Chermack, 2018). In 1967 Ted Newland led a project titled ‘Year 2000’ which “projected demand for oil would reach 110,000,000 barrels per day which seemed impossible at that time” (Chermack, 2018, p 49). This report stimulated further exploration of approaches, techniques, and tools to support business planning. The initial set of Shell scenarios, using the 2 × 2 structuring matrix, predominately focused on the relationship between demand for and supply of oil and the impact on oil prices and the absorptive capacity of producing countries. These scenarios did not produce any actions or impact on Shell’s strategy as the messages did not connect with senior management assumptions based on their past experiences. The search was on for an understanding of how to make scenarios impactful. The focus that emerged was to develop issues from the scenarios that were ‘predetermined’ and differentiate those from issues that were uncertain. Predetermined elements were identified as aspects of the area under study which were ‘in the pipeline’ and would occur in the future as they were happening but not yet seen or experienced. In addition, the next set of Shell scenarios were not developed using the 2 × 2 structuring matrix (Wilkinson and Kupers, 2013). Wack was dissatisfied with the 2 × 2 structuring matrix and sought an alternative approach. Initially research was conducted into the factors that interacted to understand the oil supply and demand and price relationship, especially the changing attitudes of oil-producing countries. These scenarios were called the A-family, which depicted a discontinuity due to changing attitudes to supply by Middle East counties. Although Royal Dutch/Shell has been widely recognised as being at the forefront of applying the scenario process since the mid-/late 1960s, at the time it was fraught

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with internal tensions as changes to the planning system were proposed (Jefferson, 2012). Jefferson (2012) also noted that assumptions about the motivations of oil-exporting countries highlighted misunderstandings and errors of judgment within Shell. Some examples included under-estimating the absorptive capacity of oil exporting countries to manage their revenues, under-estimating the oil reserves and lifetime of production for the oil exporting countries, and failing to recognise the impact of oil price increases on inflation and the fiscal budgets of oil-importing counties (Jefferson, 2012). Jefferson (2012) noted that “some of these basic points: scenario ‘building blocks’ already ‘in the pipeline’ and forming ‘predetermined elements’ which were not pursued early enough or deep enough, or when pursued by some of his closest colleagues were either not initially accepted or half-heartedly communicated” (p 193). Reflecting on 50 years of scenario planning in Royal Dutch/Shell, Wilkinson and Kupers (2013) state that “scenarios are not predictions but plausible stories about the future. They are designed to help break the habit, ingrained in most corporate planning, of assuming that the future will look much like the present. They create a safe space for dialogue and for acknowledging uncertainty – allowing an organization to see realities that would otherwise be overlooked” (p 121). Focusing on the plausibility of the stories about the future(s) in the scenarios was intended to determine “what happens at a scenario’s horizon date is not as important as the storyline’s clarity of logic and how it helps open the mind to new dynamics” (p 122). Therefore, it is important to note that scenarios are stories about the future, to understand potential future dynamics, so there is little focus on learning (de Geus, 1986), unlearning, or foresight in the here-and-now (Burt and Nair, 2020). The focus is on the detached, external environment to identify the underlying driving forces. Wilkinson and Kupers (2013, p 127) conclude that “at Shell and elsewhere, scenarios have helped leaders prepare for futures that might happen, rather than the future they would like to create” which is widely understood as the key outcome of scenarios. Their focus is on uncertainty, regarding which Wilkinson and Kupers note that “scenarios create a safe space in which to acknowledge uncertainty” (p 122). However, this compares with the alternative approach proposed in this book which focuses on the constantly changing world. Curiosity about the changing world helps encourage interpretation and reinterpretation of experiences and events, with no constraints or restrictions of longitudinal time, to overcome fragmented narratives (Burt, Mackay and Mendibil, 2021), with the development of new insights in the here-and-now, the essence of reframing. So, what is the essence of strategic conversation with scenarios? Wilkinson and Kupers argue that scenarios “introduce discontinuities so that conversations about strategy which lie at the heart of any organization’s capacity to adapt” (p 124). Discontinuities are considered as dramatic changes in the business environment. Introducing discontinuity in scenarios may act as an attention-grabbing device. However, it does not necessarily help in making sense of the changing situation. In the constantly

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changing world there are normally events and experiences that are of concern to the management team, and the role of scenarios should be to help them develop a deeper understanding (and limitation) of their perceptions of these events and experiences. Their concerns have not been resolved, so the scenarios provide time and space for the collective/management team to move to a position of unequivocality about their concerns. Rather than creating a discontinuity to grab management attention, the set of scenarios provides them with a wider view of the changing world. This is the essence of scenarios as strategic conversation, and if this is achieved, the implications and insights will be the basis of future actions and organising. Across many writers and theorists about scenarios there is consensus that the key to scenarios is the power to open and change mindsets (Wack, 1985a; Wack, 1985b; de Geus 1988; van der Heijden, 1996/2005; Bezold, 2010; Ringland, 2010; Mackay and Burt, 2015; Sarpong and Maclean, 2016; Burt and Nair, 2020). As Wilkinson and Kupers note “scenarios have the power to engage and open the minds of decision makers so that they pay attention to novel, less comfortable, and weaker signals of change and prepare for discontinuity and surprise” (p 126). The focus is on discontinuity in the future. Pierre Wack’s draft working paper, “Scenarios – The gentle art of re-perceiving: One thing or two learned while developing planning scenarios for Royal Dutch/Shell”, that ultimately emerged as two papers in the Harvard Business Review in 1985 noted that “in times of rapid change and increased complexity, however, the manager’s mental model becomes a dangerously mixed bag: rich detail and understanding can coexist with dubious assumptions, selective inattention to alternative ways of interpreting evidence, and illusory projections. In these times, the scenario approach has leverage and can make a difference” (1985b, p 150). Furthermore, Wack sets out the problem and the solution, in broad terms. Wack (1985b) states that “scenario planning aims to rediscover the original entrepreneurial power of foresight in contexts of change, complexity, and uncertainty” (p 150). However, in ‘promoting’ scenario planning as the basis of entrepreneurial power for foresight, Wack did not detail the how, the stages, and the process of reframing. Reframing is complex. Reframing with scenario planning is complex, and ultimately it is about generating insights and novel ways of seeing and understanding the familiar, novel ways of seeing and understanding the unseen in the familiar, and novel ways of seeing and understanding the unseen. In developing a deeper understanding of reframing the following definition is used: To reframe, then, means to change the conceptual and/or emotional setting or viewpoint in relation to which the situation is experienced and to place it in another frame which fits the ‘facts’ of the same concrete situation equally well or even better, and thereby changes its entire meaning (Watzlawick, Weakland and Fisch, 1974, p 95).

Such reframing is powerful for an individual or a collective/management team as the consequences for them and subsequent action(s) are fundamental to understanding and responding to the constantly changing world.

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Reframing with the scenario process is at the heart of ‘strategic conversation’ where observations, events, and experiences are discussed, debated, defined, and redefined to develop new meaning of experiences and a clearer understanding by the collective/management team of their changing world. Watzlawick, Weakland, and Fisch (1974) state that “such ‘meaning’ is not just a matter of intellectual, objective understanding, but of the entire personal significance of the situation in question” (p 96). Therefore, reframing with scenarios requires individuals and the collective/management team to have a disposition of openness, questioning, creativity, and reflexivity during the scenario process. As such, individuals and/or the collective/management team require the “capacity to live with and tolerate ambiguity and paradox” (Ward, 1963, p 15) and “to engage in a non-defensive way with the changing world, resisting the impulse merely to react to pressures inherent in risk-taking” (French, 2001, p 482). To varying degrees either as individuals and/or a collective/management team, this openness disposition should enable them to use the scenario process to reach beyond current thinking to find new, novel, and innovative ways of coping with a complex and constantly changing world, whilst avoiding simplification of challenges and premature closure. The characteristics of an ‘openness disposition’ (Burt, Mackay, van der Heijden and Verheijdt, 2017) are derived from three dimensions of the management team’s ‘readiness’ – balance of thinking, attitude to timescales, and behavioural orientation to action. The first dimension, ‘balance of thinking’, focuses on an individual’s capability to hold either a single view or multiple views of both the organisation and its constantly changing world. An individual with a predominately singular and inward view of the organisation is unlikely to be comfortable with discussing and exploring the complexity and ambiguity of the constantly changing world. A limited worldview and emphasis on certainty are likely to prevail. The second dimension of ‘attitude towards timescales’ (and the nature of time) focuses on an individual’s view of time as linear and fixed, i.e., chronological, and orderly, as opposed to time being fluid, changeable, and open to interpretation and reinterpretation as more insights and connections about and between past and present events and experiences become visible and materialise. Understanding that time is fluid enables individuals and collectives/management teams to reassess their understanding of the issues that concern them. The third dimension of ‘orientation in behaviour’ focuses on an individual’s capacity to move from a singular focus, for example, a focus on day-to-day operations, or a focus on goal orientation and the related intended outcome to a multi-modal approach that embraces thinking, doing, exploring, exploiting, etc. including managerial readiness to embrace complexity and ambiguity when engaging with the scenario process (Burt, Mackay, van der Heijden and Verheijdt, 2017). During the scenario process individuals should be comfortable with the unpredictable nature of dialogue, conversation, exchanges, flow, and outcome(s). During the dialogue and conversation individuals should be ready to seek out alternative explanations of their experiences, hidden motivations of stakeholders, counter-intuitive

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explanations of events, welcome and not reject contrary views, absorb and not reject the views of colleagues and third-party input, and develop an understanding of the consequences of these issues for themselves and their organisation. Foresight emerging from such dialogue and conversations is the development of a “refined sensitivity for detecting and disclosing invisible, inarticulate or unconscious societal motives, aspirations, and preferences and articulate them in such a way to create novel opportunities hitherto unthought” (Chia, 2004, p 22). The challenge of reframing with scenarios is to generate novel discoveries and insights about the changing world in the here-and-now. This will be discussed in much more detail in later chapters, with case studies presented, with vignettes of real-time discussions illuminating the revelations that emerged between individuals and/or the management team during the scenario process. Strategic conversations harness plurality and variety of voices and issues, enabling socially negotiated order between individuals and the collective/management team that resulted in the reframing of their situation. Whilst the outcome established by Wack (1985a; 1985b) about reframing is comparable, however, the approach proposed here is very different from his Shell experiences. Wack based his approach on detailed research and analysis to differentiate ‘predetermined elements’ from uncertainties in the situation under consideration. The uncertainties were subsequently ‘exposed’ to develop alternative pathways to the future. These alternative pathways were then debated in an objective and logical manner to discover if they were plausible or not. Given the focus on the constantly changing world there is a question mark around ‘predetermined elements’. The proposal here is based on talk, dialogue, and conversation to move an individual and the collective/management team from a position of equivocality to unequivocality about the significance of events and their experiences. Knowing and seeing the situation in the here-and-now. Other businesses recognised the role of scenario planning, including, but not limited to, British Airways (Moyer, 1996), Shell and the oil majors (Grant, 2003), Rabobank (de Ruijter, 2007), Nokia (Ralston and Wilson, 2006), and ICL (Ringland, 2002). Each is discussed briefly below, highlighting the scenario processes deployed and the impact of the scenario process; however, there was no discussion on reframing which Wack (1985a; 1985b) argued was central to changing ‘mental maps’. There was also little or no discussion on the role of language to underpin strategic conversations. British Airways (Moyer, 1996) focused on the role of technology, the nature of governance, and global economic growth in developing scenarios for the first time. Traditionally planning focused on the forthcoming budget year and a three-year forward forecast. Plans tended to be “focused on operational improvement” (p 173). The focal issues were agreed upon as governance and economic growth. The scenario process produced two scenarios, set 10 years into the future – ‘Wild Gardens’, where fragmentation between nations dominated, and ‘New Structures’, where accommodations are found to ensure economic growth continued into the future. Significant research was undertaken prior to the commencement of the scenario process, which was initiated by a round of interviews with senior managers. The challenge of linking scenarios to

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the business plan was considered a success as there was organisation-wide engagement with and across geographies and functions. By presenting two scenarios there was the issue of managers preferring one scenario over another. There was no discussion on scenarios as strategic conversation. Strategic planning and the oil majors (Grant, 2003) discussed the idea of ‘planned emergence’ whereby there is a reconciliation between the traditional approach to strategic planning by linking decentralised bottom-up strategy through constraints and systems to ensure control. Such an approach provided some flexibility in decentralised units; however, there were planning controls and requirements imposed on decentralised units from the centre. The case studies do not illuminate a process approach to planning, or the role of scenario planning, at the decentralised level. Nokia (Ralston and Wilson, 2006) had experienced an unprecedented prior record period of growth and success. However, senior management were increasingly concerned about the sustainability of their performance given significant and rapid changes in their business landscape. To address this situation, and challenge internal mindsets, Nokia had a ‘New Ventures Organisation’ and then set up a quasi-independent group called Innovent (p 27). Interestingly, Innovent was based in Silicon Valley, not at headquarters in Helsinki, to further reinforce its independence. Scenario planning was the approach to help support the development of new ideas and innovation. Like the BA, ICL, and Rabobank there was some concern in establishing the initial focal question. Four scenarios were produced – ‘Battle of the Brands’, ‘Enlightenment’, ‘Tale of Two Cities Revisited’, and ‘Community Coup’. Once the scenario stories were fully developed and written up, the participants then sought to identify opportunities for Nokia, by identifying opportunities that were emerging in each scenario. Nokia was searching for certainty in the future, and this is evident in the framing of strategic questions such as: “What areas of opportunity would have the most value for Innovent and Nokia if we absolutely knew that this scenario was going to occur?” (p 32). Such a question narrows the scope for learning and reframing with scenarios as it fails to recognise and reinterpret limited understanding of the past. Such a question also assumes that thinking and assumptions that emerge from the scenario process will remain valid in the future. ICL (Ringland, 2002) identified a team that experimented with scenario planning to help it develop its ‘Vision 2000’ (p 9), deriving three scenarios from a trend analysis and focused on economic growth and technology adoption. The three scenarios were ‘Stagnation’, ‘Baseline’, and ‘Technogrowth’. Stagnation highlighted low consumer confidence and its impact on growth and high organisational demand for technology to reduce costs. Baseline highlighted high consumer demand for technology and low organisational demand for technology. Technogrowth highlighted high consumer and organisational demand for technology set in low economic growth. However, there was a lack of incorporation with planning (p 14). The subsequent scenario project developed two scenarios: ‘Coral Reef’ and ‘Deep Sea’, metaphorically distinguishing a business landscape that was either “diverse, with

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much visible activity and complex food chains” or “less diverse, with fewer species on mainly larger fish” (p 33). Trend analysis is helpful in broadening the scope of individual and collective thinking; however, it assumes clarity on the present and does not recognise issues on the periphery that may be relevant. The scenario process lacked engagement with and exclusion of decision makers in the process (p 40) and this potentially reduces the opportunity to challenge assumptions and reframe understanding. Rabobank (de Ruijter, 2007) faced a changing competitive landscape with technologically based new players and a decline in the number of people visiting the physical bank daily or on a regular basis. The case study explains the development of a ‘Viewing Futures Network’ that grew organically within the bank, its ethos linked to cooperative community of related organisations, and the freedom to undertake projects to support thinking within Rabobank. The flexibility and commitment of these cooperative community stakeholders developed over time and engaged a wide range of individuals internally. The activities undertaken were captured by a wide range of media and these were disseminated openly and widely internally. Two scenario projects were undertaken simultaneously, one on the ‘price of money’ (p 245) which would consider interest rate movements in the future and movement impacts on interest income for the bank and interest payments to customers; the other project was on the ‘future of society’ and how consumers would behave in the future (p 245). The first scenario project generated three scenarios – ‘Consolidation’, ‘Volatility’, and ‘Dynamics’ – identifying counter-intuitive insights about the dynamics and changes in financial markets for Rabobank. The second project focused on the changing nature of society and consumers, with critical uncertainties of ‘attitude of society’ – individualistic or collective – and ‘financial sector dynamics’ – thriving and prospering or crowded and deteriorating. The outcomes challenged assumptions and raised a number of questions not previously considered by Rabobank. These scenario projects are set out and discussed and there is evidence that there was a shift in assumptions about the business landscape within Rabobank. The case study highlights a movement on assumptions deeply grounded in a traditional banking and financial services (internal) mindset to a more consumer-centric (external) mindset. However, whilst this can be considered a success of the scenario projects, it does not reveal any insights about the process of reframing. There are four common themes that can be drawn out from the above case studies. First, the approach to scenarios based on the ‘Cartesian’ separation of organisation and environment. Second, a focus on the futures without reinterpreting the past to help better understand what was emerging in the present. Third, a search for strategic options across all scenarios to reduce risk and bring certainty to decisionmaking. Fourth, the role of language in challenging managerial assumptions, how language developed, and how it helped underpin strategic conversations. Cartesian separation of organisation and environment emphasises an ‘entitiative’ understanding of ‘organisation’ where it is abstracted by individuals and is detached from its environment. It is a standalone entity, with clearly defined boundaries, moving

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from one static position to another static position. Such an understanding is detached from the natural ongoing changes, seen and not seen, that occur to all living entities. Focus on the future without reinterpreting the past and better understanding what was emerging in the present. The past is not fixed; it can be interpreted and reinterpreted as more events and knowledge become evident with the passing of time. Focus on the future also reinforces a ‘navigation’ to the desired destiny, despite the continually changing and unfolding world. Search for strategic options across all scenarios to reduce risk and bring certainty to decision-making, which reinforces the ‘entitiative’ understanding of ‘organisation’. The stable organisation determines which options it should agree to enact, with the organisation remaining (relatively) unchanged and stable. However, this precludes the opportunity for reframing to develop the basis of organising. The role of language in challenging managerial assumptions, how language developed, and how it helped underpin strategic conversations. In the case studies discussed above the scenario story titles acted as a metaphor for potential futures, helped challenge assumptions, and raised questions about the future. What is less evident is how novel new language infiltrated and penetrated the ongoing sensemaking and organising. The argument here is that novel new language is fundamental to reframing and the basis of organising. One critical feature that emerges from these case studies is the lack of discussion around reframing with scenarios. Whilst there was extensive discussion around the development of scenarios, discussion of the steps in the process deployed, there was a lack of in-depth discussion, and on how scenarios changed ‘mental models’. Changing mental models is widely accepted in the scenario literature as a key element to judge success, yet it raises questions about such claims given the lack of focus on reframing whilst simultaneously advocating the impactfulness of the application of the scenario process in the above case studies. The next section discusses the role of scenarios for organisational learning, which emerged as an antidote to the challenge of linking scenarios to strategy.

Scenarios as Organisational Learning ‘Learning to plan and planning to learn’ (Michael, 1997) was a major juncture in the 1970s where the idea of learning as a key ingredient to planning brought a challenge to the idea of scenarios as exploring and mapping socio-macroeconomic systems. Michael’s (1997) influential book, first published in the early 1970s, challenged the traditional approach to planning, including Shell, but it is not widely recognised within the scenario/foresight community.

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Michael critiques the traditional approaches to planning, stating: Traditional planning implies constraints. Planning by learning reduces constraints. Instead of being gratuitously blindsided by counterproductive consequences from short-term expedients, the process of ongoing learning reveals new options in the light of contexts illuminating longer time periods. The learning and planning emphasized here could be called, alternatively, discovering, exploring, experimenting (p 2).

Traditional planning, at the time, was based on forecasts, predominately single-line forecasts, with assumptions changing very little from year to year or period to period. Michael (1997) argued that such an approach disabled thinking and was considered the antithesis of learning. Michael provides five explanations to emphasise his thoughts on the limitations of traditional planning. These include boundary constraints, rules and rules following, recipes and stable assumptions, problem solving, and behaviour to preserve stability. Boundary constraints delineate the organisation from the changing world and boundaries are likely to create a ‘what’s for us/what’s not for us’ mindset, thus reducing the potential for ‘open field’ process thinking (Cooper, 1976), where an open mind, flexible rather than fixed positions, chance interpretations of events and experiences are linked with the idea of and making sense of the dynamic and changing world. Yet, managers act to maintain boundaries and structures, focusing on activities that are perceived as problematic to maintaining the boundary. Boundary constraints limit creativity to define and refine the basis of organising as an ongoing activity. Rules and rules following act to constrain innovation by managers as they would be perceived as ‘being out of line’ with other contemporary managers. Closely linked to rules and rules following are recipes which build up over time as individuals and collectives make sense of their organisation and seek to focus on such knowledge going forward into the future. It is widely recognised that many managers do not embrace change, preferring stability, and look to activities and routines that maintain and protect their assumptions about the organisation and how it operates. Once a manager is in such a mindset they become rigid in thinking and reactive, focusing on problem solving to maintain stability. Interestingly, organisations tend to reward the ‘energetic problem-solver’ (van der Heijden, Bradfield, Burt, Cairns and Wright, 2002) and fail to question why a problem arose in the first instance. All issues identified by Michael, whether at the individual or collective level, impact managerial behaviour to limit the time and willingness to explore and discover new ideas about the changing world. Michael further argues that searching for information or understanding about events and experiences increases the perceived level of uncertainty faced by an organisation. Exploring events and experiences and embracing uncertainty may increase anxiety and be counter to the perception of being in control of the organisation’s destiny. Where there is a willingness to seek out information there are “doubts about the validity, reliability, or integrity of information sources” (p 14), reinforcing the managerial view of ‘business-as-usual’.

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Michael also argues that there are a wide range of psychological barriers for individuals to become learners and, therefore, limit planning as learning. These barriers include “fear, distrust, denial, self-protection, invulnerability, and reducing willingness to engage in making sense of the changing world”. Michael argues that to overcome these issues and concerns the focus of ‘planning as learning and learning and planning’ is “a dialectical process . . . that is futureresponsive” (p 37). However, there is a paradox in this proposal as Michael recognises that “we construct social reality and that is opens up possibilities for major change” (p 15); however, where managers perceive that the organisation has a boundary it implies an entitative mode of thinking. An entitative mode of thinking “seduces us into thinking about organisations as free-standing entities rather than as effects produced through precariously balanced figurational patterns of actions and interpretations” (Chia, 1996, p 143). Such free-standing entities succumb to the issue of managers acting to maintain stability. The alternative, that is developed in this book, is to understand that organising (as opposed to the stable entity ‘organisation’) emerges through talk, dialogue, and interpersonal exchanges; organisation is imminent. Scenarios as strategic conversation provide the safe space for such exchanges, facilitating the creative exploration of and novel insights into the unfolding world. These exchanges are likely to surface issues that include ‘what we like/what we don’t like’ and ‘what we fear or what we covet’, to enter managerial thinking, possibly indelibly, with insights and novelty infiltrating decision making and actions on a continuing basis. The scenario process creates the safe space for conversational exchanges, which would not necessarily happen on their own, due to the focus on the future. However, if we think about scenarios creating a safe space for exchanges, disguised as thinking about the future, then the creation of new language and novel insights, resulting in ‘infiltration’ to the ongoing dialogues, is the key to challenging assumptions. The scenario process therefore raises the level of fidelity in thinking, that is, increased sensitivity, increased openness, increased receptivity, increased nuanced understanding of experiences, and increased willingness to have understanding challenged. The analogy of ‘fidelity’ is drawn from the comparison between vinyl records and digital music, where vinyl records produce a sound that is more like the original production, with digital music less able to translate original analogue recordings, losing purity in the process. This is in contrast to the many publications that reify scenario outcomes, for example, the BA case study discussed above, where two scenarios were created, ‘Wild Gardens’ and ‘New Structures’, which ignores novelty and does not explain the process of reframing. So, we might have the headline outcomes from a scenario session, some sort of diagram, story map, systems diagram, or potential strategy statements. But perhaps more important is the less effable difference that the scenario work might make in us and our colleagues, in how we think, talk, and act, because of a shared experience that is highly unlikely to happen on its own. How does novel understanding emerge

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during the scenario process? How does reframing occur as an outcome of the scenario process? How does new and novel language infiltrate the day-to-day conversations of management teams? The case studies presented later in the book will address these questions and identify the process of reframing that occurred. Doing so will preserve the notion of ‘planning as learning, learning as planning’ as a viable theoretical concept, however, with rich empirical evidence to bring it to reality. As we will argue, ‘planning as learning, learning as planning’ is intimately linked to strategic conversation, foresight in the here-and-now, and reframing.

Scenarios as Strategic Conversation van der Heijden (2005) set out the art of strategic conversation as a dynamic feedback loop involving three elements (p 325): an organisation as a community existing within interactions within a strategic conversation, the strategic conversation is a learning loop, and strategy emerges from subsequent actions. An organisation is a community, based on a system of interactions which exist in a strategic conversation

Strategy is a coherent pattern of action that consciously intervenes in the ongoing evolution of the organisation

A strategic conversation is a learning loop, of perception, conceptualisation, and action

Figure 3: The art of strategic conversation (van der Heijden, 2005).

van der Heijden (2005) stated: Scenarios provides space to share ideas and develop new knowledge. The language of uncertainty is now not any longer disempowering. There is now ‘approval’ to consider other perspectives. The conversation moves from arguing about, and defending worldviews, to negotiating action through a process of accommodation of alternative views (p 323).

Strategic conversation is now common currency within the scenario literature (Bood and Postma, 1997; MacKay and McKiernan, 2010; Bowman, 2016; Frith and Tapinos, 2020; Mukherjee, Ramirez and Cuthbertson, 2020). However, there is scant empirical evidence and explanations to provide a more theoretical grounding of scenarios as strategic conversation. Mukherjee, Ramirez, and Cuthbertson (2020) presented two case studies that suggest that strategic conversations during the scenario projects “enables the managers engaging with uncertainties emanating from the macro level and revisit

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the core assumptions of their businesses at the micro level by re-perceiving business roles in the imagined, reframed future macro-meso contexts i.e., the future scenarios” (p 9). Assumptions about the businesses were mapped at the outset of the scenario process, then developing a “future safe space” (p 9) with alternative scenarios to consider how uncertainty may resolve. With the vantage point of the future the participants assessed the implications of the scenarios and compared their initial assumptions with the implications of the scenarios. However, this explanation sits within the ‘entitative’, detached view of the organisation-environment relationship and is thus an episodic approach to making sense of the constantly changing world. There is also a danger of choosing either the perceived ‘best’ option, or the ‘least bad’ option as a response to the scenarios. Whichever approach is considered and adopted it does not provide an explanation for or insight into the role of strategic conversations and the process of reframing. Building on the foundations provided by van der Heijden (2005), the objective of this book is to propose a new and advanced theoretical explanation of strategic conversation. There are four elements in the refined explanation, which are contextualised in an organisation’s constantly changing world: ongoing dialogue, talk, and interpersonal exchanges about events, experiences, and concerns; making sense of the constantly changing world with scenario process to generate novel insights and foresight; reframing the organising to reflect the insights, demands, and requirements of the constantly changing world; and subsequent actions forming the basis of ongoing organising activities. These activities would be part of an ongoing strategic conversation process as participants negotiate and shape day-to-day decisions to reflect their novel understanding of their organisation. Constantly changing world

Actions forming the basis of organising

Dialogue, talk, and interpersonal exchanges

Reframing the organisation

Figure 4: Scenarios, strategic conversation, and foresight (Burt, 2022).

The new and advanced explanation broadens the role and nature of strategic conversations with scenarios, reflecting how foresight is central to the ongoing basis of organising. Scenarios provide the space for multiple voices to be heard, without prejudicing

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one over another. Opening up multiple perspectives on events and experiences that challenge the management team, including counter-intuitive ideas and insights as well as identifying flawed assumptions. The transformation in language is the basis of radical learning which “occurs when creative linguistic interventions in dialogue open up semantic spaces whereby new terms are coined and old ones broken up, or combined and/or redeployed in novel ways, in an effort to give expression to the fresh circumstances experienced or new phenomena observed” (Bosma, Chia and Fouweather, 2016, p 14). Insights emerging during the scenario process facilitate in generating novel linguistic expressions and developing new understanding of events and experiences that challenge the existing views of the management team. Semantic transformation opens up possibilities through insights about the propensity of the changing situation (Jullien, 1995) and is the basis of foresight in the here-and-now. These insights challenge past and current organising assumptions, resulting in the reframing and redefinition of the organisation with subsequent actions evolving in the constantly changing world. Dialogue and interpersonal exchanges are ongoing and evolve as decisions and actions are refined. Such an explanation is theoretically underpinned by communication constitutive of organisation (Deetz, 2003; Cooren and Taylor, 1997; Tsoukas, 2009; Reed, 2010; Cooren, Kuhn, Cornelissen, and Clark, 2011).

Communication Constitutive of Organisation Recent debates and discussions about the linguistic turn in the wider strategy literature orient a focus towards the day-to-day social interactions and discussions between managers (Alvesson and Karremen, 2000; Vaara, 2010; Cunliffe and Scarratti, 2017). Why? In every organisation “specific personal experiences and objects of the world are not given in a constant way but are outcomes of a pre-subjective, pre-objective inseparable relationship between constitutive activities and the ‘stuff’ being constituted” (Deetz, 2003, p 422). We make, unmake, and remake sense of our changing situation. Scenarios as strategic conversation orientate an understanding that recognises that “organization is a discursive phenomenon, constructed and understood through talk” (Taylor and Cooren, 1997, p 410). “Organization comes into being performatively, through language which is grounded in collective processes of legitimization” (p 410). Taylor and Cooren argue for Austin’s (1962) “distinction between speech as constative (information about facts) and speech as performative (i.e., an act accomplished by means of speech)” (p 411). Strategic conversation with scenarios is grounded in performative activities (and may well be supplemented by constative activities). Therefore, the move towards a linguistic turn helps us understand the subjective nature of situated experiences and events, as opposed to the separation of organisation and environment. If experiences are subjective, how are they constituted in terms of situational sensemaking and organising, in an indeterministic world?

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Bosma, Chia, and Fouweather (2016) argue that “in order to restore sensemaking activities (both retrospective and prospective), a new past, a new present, and a new future that are radically different to the ones previously established have to be linguistically constructed” (p 16). The scenario process is designed for such a purpose. “Semantic transformation involves a dialogical process in which fresh semantic spaces are creatively opened up, whereby new terms are coined, and old ones broken up, combined, and/or redeployed in novel ways, in an effort to express the fresh circumstances experienced or new phenomena observed” (Bosma, Chia, and Fouweather, 2016, p 16). Through semantic transformation managers “are able to reconfigure our prevailing patterns of meanings such that our horizons of comprehension are extended, rendering what was previously unthought as comprehensible” (Bosma, Chia, and Fouweather, 2016, p 16). Semantic transformation is a reflexive process where current assumptions, understanding, and language are “found wanting” (p 16). The scenario process provides the space for interpersonal exchange and conversations, and through dialogue individuals are able to understand the legitimacy or otherwise of their current assumptions and understanding. Questioning their current assumptions and understanding is key to sense-giving and sense-making between a management team. Disruption to their current assumptions and understanding acts as the stimuli to unlearning and foresightful thinking in the here-and-now (Burt and Nair, 2020). Scenario planning based on established laws is predicated on a deterministic worldview, where systems analysis and economic laws applied to analyse the situation of interest (Wack, 1985a; 1985b; Burt, 2010). This is seductive as it empowers the impression of an applied logic to overcome uncertainty and bring certainty to the situation. Foresight here is based on linking an accepted past to a recognised present, and to a potential future through causal logic and reasoning. Such an approach fails to recognise the nuances of language as existing words retain their established meaning, which reduces the opportunity for novel expressions. However, the linguistic turn, as hinted at by strategic conversation, invokes the constitution of organising through talk, exchanges, debates, and dialogical conflicts as the basis of making explicit polyphonic voices to socially negotiate order. Such a “radical engagement in groups with communication as the participatory interaction process where openly conflictual formation occurs” (Deetz, 2003, p 426) is the basis of generative foresight in the here-and-now. The scenario process is dynamic, unpredictable, and creative and allows for understanding to be focused on the in situ “moments unfolding in the life and time of concrete people and organizations” (Deetz, 2003, p 427). In this sense, scenarios are ideal to deal with “emergent set of social problems” as it is an exploration of events and experiences that are yet to be understood and impactful on individuals and organising.

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Conclusion This chapter has provided a detailed discussion of the foundations and evolution of scenario planning over a sixty-year period, from thinking about the unthinkable to the gentle art of reperceiving to the art of strategic conversation. The chapter has explored and developed the idea of ‘scenarios as strategic conversation’, expanding our understanding of it based on a discussion about the role of conversations, interpersonal exchanges, and dialogue as the basis of ‘semantic transformation’ to reveal how foresight emerges. These ideas and proposals will be developed in more detail in the next two chapters.

References Alvesson, M., Karremen, D. (2000) Taking the linguistic turn in organizational research: Challenges, Responses, Consequences, The Journal of Applied Behavioral Science, 36 (2), 136–158 Berger, G. (1957) Sciences humaines et prévision, La Revue des Deux Mondes 3, in: André Cournand, Maurice Lévy (Eds.), Shaping the Future. Gaston Berger and the Concept of Prospective, Gordon and Breach, New York, 1973. Bezold, C. (2010) Lessons from using scenarios for strategic foresight, Technological Forecasting and Social Change, 77 (9), 1513–1518 Bood, R. Postma, T. (1997) Strategic Learning with Scenarios, European Management Journal, 15 (6), 633–647 Bowman, G. (2016) The practice of scenario planning: An analysis of Inter- and Intra-Organizational Strategizing, British Journal Of Management, 27, 77–96 Burt, G. (2010) Revisiting and extending our understanding of Pierre Wack’s gentle art of re-perceiving, Technological Forecasting and Social Change, 77 (9), 1476–1484 Burt, G., Nair, A. K. (2020) Rigidities of imagination in scenario planning: Strategic foresight through ‘Unlearning’, Technological Forecasting and Social Change, 153 Burt, G., van der Heijden, K. (2008) Towards a framework to understand purpose in futures studies: The role of Vickers Appreciative System, Technological Forecasting and Social Change, 75 (8) 1109–1127 Burt, G., Mackay, D. J., van der Heijden, K., and Verheijdt, C. (2017) Openness Disposition: readiness characteristics that influence participant benefits from scenario planning as strategic conversation, Technological Forecasting and Social Change, 124 (11), 16–25 Burt, G. Mackay, D., Mendibil, K. (2021) Overcoming multi-stakeholder fragmented narratives in land use, woodland and forestry policy: The role of scenario planning and ‘dissocitiative jolts’, Technological Forecasting & Social Change, 166 (120663) Chatel, B., de Jouvenel, H. (1973) Prospective studies in France: Their possible usefulness for international purposes, Technological Forecasting and Social Change, 5, 265–279 Chermack, T. J. (2018) An Analysis and Categorization of Scenario Planning Scholarship from 1995-2016, Journal of Futures Studies, 22 (4), 45–60 Chia, R. (1997) Process Philosophy and management learning: Cultivating ‘foresight’ in management education, in Burgoyne J and Reynolds M (eds), Management Learning: Integrating perspectives in theory and practice, Sage Publications, London, pp 71–88 Chia, R.(2002) The production of management knowledge: philosophical underpinnings of research design. In: Partington, D. (ed.) Essential Skills for Management Research. SAGE Publications: London, pp. 1–20

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Chia, R. (2004) Re-educating attention: What is foresight and how is it cultivated? In H. Tsoukas and J. Shepherd, Managing the Future: Foresight in the Knowledge Economy, Oxford, Blackwell Publishing Limited, pp21–37 Cooper, R. (1976) Organs of Process: Rethinking Human Organization, Organization Studies, 28 (10), 1547–1573 Cornelius, P., Van de Putte, A., Romani, M. (2005) Three decades of scenario planning in Shell, California Management Review, 48 (1) 92–103 Cunliffe, A. L., Scaratti, G. (2017) Embedding Impact in Engaged Research Developing Socially Useful Knowledge, British Journal of Management 28, 29–44 Cooren, F., Taylor, J. R. (1997) Organization as an effect of mediation: Redefining the link between organization and communication, Communication Theory, 7 (3), 219–260. Deetz, S. (2003) Reclaiming the legacy of the linguistic turn, Organization, 10 (3), 421–429 Duncan, R. B. (1972) Characteristics of organizational environments and perceived environmental uncertainty, Administrative Science Quarterly, 17 (3), 313–327 Eden, C. (1992) Strategy development as a social process, Journal of Management Studies, 29 (6), 799–811 French, R. (2001) Negative capability: Managing the confusing uncertainties of change, Journal of Organizational Change Management, 14 (5), 480–492 Frith, D. Tapinos, E. (2020) Opening the ‘black box’ of scenario planning through realist synthesis, Technological Forecasting & Social Change,151 (119801) Bosma, B., Chia, R., Fouweather, I. (2016) Radical learning through semantic transformation: Capitalizing on novelty, Management Learning, 47 (1), 14–27 de Geus, A. P. (1986) Planning as learning, Harvard Business Review, March-April, 70–74 Godet, M. (1986) Introduction to La Prospective, Futures, 18 (2), 134–157 Godet, M. (2010) Future memories, Technological Forecasting and Social Change, 77, 1457–1463 Grant, R., M. (2003) Strategic planning in a turbulent environment: Evidence from the oil majors, Strategic Management Journal, 24 (6), 491–517 Chia, R. (1996) Organizational Analysis as Deconstructive Practice, Walter de Gruyter, New York van der Heijden, K., Bradfield, R., Burt, G., Cairns, G., Wright, G. (2002) The Sixth Sense: Accelerating Organizational Learning with Scenarios, John Wiley & Sons, Chichester van der Heijden, K. (1996/2005) Scenarios: The art of strategic conversation, Chichester, John Wiley & Sons Jefferson, M. (2012) Shell scenarios: What really happened in the 1970s, Technological Forecasting and Social Change, 79 (1), 186–197 Jullien, F. (1995) The Propensity of Things: Towards a History of Efficacy in China, New York, Zone Booksy Kahn, H. (1962) Thinking about the unthinkable, Weidenfeld and Nicolson, London Kahn, H., Weiner, A. J. (1967) The next thirty-three years: A framework for Speculation, Daedalus, 3, 705–732 MacKay, B. McKiernan, P. (2010) Creativity and dysfunction in strategic processes: The case of Scenario Planning, Futures, 42, 271–281 Mackay, D., Burt, G. (2015) Strategic learning, foresight and hyperopia, Management Learning, 46 (5), 546–564 Michael, D., N. (1997) Learning to plan and planning to learn, Alexandria, VA, Miles River Press Moyer, K. (1996) Scenario Planning at British Airways – A Case Study, Long Range Planning, 29 (2), 172–181 Mukherjee, M., Ramirez R. and Cuthbertson, R. (2020) Strategic reframing as a multi-level process enabled with scenario research LRP 53 Pickett, N. (1992) A History of Hudson Institute, 1961–1992, Hudson Institute Ralston, B., Wilson, I. (2006) The scenario planning handbook: Developing strategies in uncertain times, SouthWestern, Thomson Reed, M. (2010) Is communication constitutive of organization, Management Communication Quarterly, 24 (1), 151–157

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Cooren, F., Kuhn, T., Cornelissen, J. P., Clark, T. (2016) Communication Organizing and Organization: An overview and introduction to the special issue, Organization Studies, 32 (9), 1149–1170 de Ruijter, P. (2007) Viewing futures network: Collaborative learning and innovation at Radobank, in Bill Sharpe and Kees van der Heijden (Eds.,) Scenarios for Success: Turning Insights into Action, John Wiley & Sons, Chichester, pp 235–258 Ringland, G. (2002) Scenarios in Business, Chichester, John Wiley & Sons Ltd. Ringland, G. (2010) The role of scenarios in strategic foresight, Technological Forecasting and Social Change, 77 (9), 1493–1498 Sarpong, D., Maclean, M. (2016) Cultivating strategic foresight in practice: A relational perspective, Journal of Business Research, 69 (8), 2812–2820 Tsoukas, H. (2009) A dialogical approach to the creation of new knowledge, Organization Science, 20 (6), 941–1076 Vaara, E. (2010) Taking the linguistic turn seriously: Strategy as a multifaceted and interdiscursive phenomenon, in Joel A.C., B. and Lampel, J. (Eds.) The Globalization of Strategy Research (Advances in Strategic Management, Vol. 27), Emerald Group Publishing Limited, Bingley, pp. 29–50. Vickers, G. (1995) The Art of Judgment: A Study of Policy Making, Centenary Edition, Thousand Oaks, Sage Wack P. (1984) The art of perceiving: One thing or two learned while developing planning scenarios for Royal Dutch/Shell, Unpublished manuscript, Harvard University Wack, P. (1985a) Scenarios: uncharted waters ahead, Harvard Business Review, September-October, 73–89. Wack, P. (1985b) Scenarios: shooting the rapids, Harvard Business Review, November-December, 139–150. Ward, A. (1963) John Keats: The making of a poet, London, Secker and Warburg Watzlawick, P., Weakland, J., and Fisch, R. (1974) Change: Principles of problem formation and problem resolution, London, W. W. Norton & Company Weick, K. E. (1979) The Social Psychology of Organizing (2nd ed.) McGraw-Hill, New York Whitehead, A. N. (1933) Adventures of Ideas, Penguin, Harmondsworth Wilkinson, A., Kupers, R. (2013) Living in the futures: How scenario planning change corporate strategy, Harvard Business Review, May 119–127 Zundel, M., Cour, A.L.,Lauritzen, G.D. (2021), Spencer Brown’s Paradox, in Bednarek, R., e Cunha, M.P., Schad, J., Smith, W.K. (Eds.), Interdisciplinary Dialogues on Organizational Paradox: Investigating Social Structures and Human Expression, Part B, Research in the Sociology of Organizations, 73b, Emerald Publishing Limited, Bingley, pp. 139–159.

Chapter 3 Business Idea and the Basis of Organising Organisation is a temporary stabilised event cluster (Chia, 2003, p 130). Organisation is viewed as relatively stabilized patterns of relational configurations forged through practice rather than solid, stable substances (Chia, 2019, p 396).

Introduction: Organisation or Organising The above statements highlight the tension in understanding how we think and conceptualise ‘organisation’. Organisation is a noun, indicating a stable entity (Chia, 1999; Weick, Sutcliffe and Obstfeld, 2005; Bakken and Hernes, 2006; Hernes, 2008). Here, we understand organisation as “a consciously coordinated social entity, with a relatively identifiable boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals” (Chia, 1996, p 3). Organisation therefore is a discrete entity that can be “unproblematically identified, differentiated and systematically analysed” (Chia, 1996, p 4). Such an approach readily lends itself to organisation “as system of co-ordinated action among individuals and groups whose preferences, information, interests, or knowledge differ” (March and Simon, 1993, p 3). Meanwhile, organising is a verb, indicating its impermanence requiring to be stabilised at a moment in time, emerging from the dialogue between organisational members as they move from a situation of ambiguity and equivocality to unequivocality. The process of organising reflects the need for continual making, unmaking, and remaking of ‘organisation’ to maintain relevance in the continually changing world (Weick, 2009). “Organizing, viewed as an emergent unpredictable order, rather than a distinctive, stable self as the actor, with dynamic relationships as the actor” (Weick, 2009 p 7). The danger is that managers seek stability and continuity over time, which leads to inertia and a reluctance to engage in sensemaking and organising, which can result in decline in performance. “Organizations that fail to adapt seem destined to expire as the world around them changes” (March, 1995, p 431). This chapter discusses organisation as a noun, organising as a verb, and the implications these differences have for strategic conversations with scenarios. The chapter develops the concept of the ‘business idea’ as a mode of building understanding and consensus between a management team. The concept of the ‘business idea’ is equally applicable to any organisation – public or private, and exemplars are discussed.

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Reorienting Thinking So how can we help managers with a practical approach to defining their organisation? In this chapter, and in subsequent chapters, we will set out a theoretically grounded approach to analysing, conceptualising, and building consensus about the nature of ‘organisation’. In doing so, the intention is to overcome both the limited guidance in the academic literature as well as the widely understood and accepted hierarchical or taxonomic approaches that have limited help in making (as well as unmaking and remaking) the ‘organisation’. The hierarchical or taxonomic approaches do not reveal relationships and interconnections between elements of the ‘organisation’. The hierarchical or taxonomic approaches do not reveal the tacit knowledge and understanding that managers have about aspects of their ‘organisation’. Without an understanding of relationships and interconnections, especially tacit knowledge about such understanding, it is problematic to build consensus between a management team. Sharing and exploring relationships and interconnections, as well as making explicit tacit knowledge through talk and dialogue, with an open mind, as well as the disposition to be reflexive and ability to selfchallenge thoughts, ideas, and perceptions on and about ‘organisation’ helps build consensus. Such ‘openness disposition’ (Burt, Mackay, van der Heijden and Verheijdt, 2017) is central to developing an agreed understanding of the basis of ‘organising’.

Incisions, Strategic Conversations, and the Constantly Changing World Process philosophy underpins the approach taken in this book, with the constantly changing world and the need for incisions (Chia, 1996) and temporary sensemaking (Weick, 1995). Incisions are the search for a moment of stability and organising is the means to achieving momentary stability by changing. It seems like a contradiction to theories that dominate managing. However, incisions are an activity that is “designed to facilitate and procure a form of limiting so that what is apprehended becomes henceforth bounded and therefore manageable” (Chia, 1996, p 78). Ongoing sensemaking occurs as people engage in conversations, dialogue, and inter-personal exchanges which they “undertake in undefined space, time and action, and draw lines, establish categories, and coin new labels that create new features of the environment that did not exist before” (Weick, 1995, p 31). Strategic conversation with scenarios provides a platform for incisions and sensemaking. The scenario process operates as a “field of discursivity” (Schatzki, 2005, p 471), where meaning develops as individuals communicate, share ideas, negotiate, and develop shared understanding. Chia (2014) helps us understand that incisions “are more dependent on timeliness and selectivity of engagement, rather than on the weight or superiority of force needed” (p 9). Stability and change are not the antithesis here; permanence and change are the antithesis in process philosophy. Permanence and change are related to the dominant

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entitative and Cartesian approach that is based on a duality of organisation and ‘its’ environment, with stable organisation changing without redefinition. Changes may be implemented; however, the organisation fundamentally stays the same, potentially making the organisation more resistant to change over time. However, there is a dearth of explanation of the basis of organising where incisions help in the process of making, unmaking, and remaking the ‘organisation’. Hernes (2008) amplifies this when stating “that organizational studies will emerge that address the processes of abstracting entities and of organising”, and that existing discussions are “purely theoretical studies” (p 30). In this chapter we address this gap and set out and will develop a practical approach to help managers and management teams construct, through talk and communication, the sense of who ‘they’ are as an organisation. Such talk and communication help the collective management team to share their views and move from a position of equivocality to unequivocality, with their idiosyncratic and distinctive understanding of the basis of organising, which is talked into existence (Weick, 2009). “Organizations are constituted in and through human communication” (Cooren, Kuhn, Cornelissen, and Clark, 2011, p 1149). The basis of organising is abstracted and constructed from individual and shared views and considered a temporary achievement or accomplishment in the ongoing flow of the world (Gray, Bougon, and Donnellon, 1985; Maitlis and Christianson, 2014; Weick, 2020). The case studies presented here and in the next chapter are designed to help add to our knowledge and understanding of organising.

Organising and the ‘Business Idea’ For any scenario project, or strategy project, there is a need to abstract and conceptualise ‘organisation’ derived from members’ ideas and understanding. It is through conversation and dialogue that it is possible to bring about socially negotiated order and collective shared understanding. ‘Organisation’ here is understood as a temporary stabilised outcome (Chia, 2003). The strategic conversation with the scenario process explores the organisation’s dynamic relationships, interconnections, and relationships with the constantly changing world. The intention is to help the management team move from equivocality to a position of unequivocality between them. Without ongoing conceptualisation, through a process of constructing, deconstructing, and reconstructing the basis of organising, the likely outcome is fragmentation between members, resulting in ineffective decision-making, inertia, and decline of the ‘organisation’.

Towards an Understanding of the Basis of Organising – Bundles of Social Practices The scenario process is designed to provide a ‘safe space’ for the exchange of ideas and exploration of ideas, practices, and routines that are related to the basis of organ-

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ising. In developing an understanding of practices and routines Schatzki (2005) proposes that we “treat practices such as those of politics, cooking, gardening, and education as collective, social arenas of action that are pervaded by a space of meaning in whose terms people live, interact, and coexist intelligibly. These arenas are ‘collective’ in embracing multiple people and ‘social’ in being common to those people.” (p 470). In these spaces “practices thus constitute the site of the social: all social life inherently transpires as part of these practices” (Schatzki, 2005, p 470). “Human coexistence inherently transpires as part of practice-arrangement bundles” (Schatzki, 2005, p 472) with everyday actions – purposive and purposeful, problemsolving activities, conversations, regularities, intended and unintended consequences all interacting to create the practice-based bundles of patterns. In addition, everyday actions are also influenced by the material settings in which the actions occur. Material settings like “building and physical layouts, networks, and artefacts are arrangements of material entities. Hence, human coexistence transpires as part of, not practices alone, but a mesh with material arrangements as well” (Schatzki, 2005, p 473). People influence material settings and material settings influence people. Why are practices important for organising? “Practices connect when, among other things, actions from different practices form chains, actions from different practices (i.e., grading in education and conducting research in academia) are performed in the same places in the department’s arrangements (e.g., an office), and actions from one practice are objects of the mental states (e.g., beliefs) of participants in others. The practices involved also rarely conflict in the sense that the perpetuation of one is incompatible with the continuation of the other” (Schatzki, 2005, p 474). Understanding ‘organisation’ as bundles of social practices is the antithesis of hierarchical approaches to analysing ‘organisation’. Bundles of social practices reflect the complexity of everyday organisational life. How to capture and transform a management team’s ideas and interpersonal exchanges into bundles of social patterns to create a shared understanding of ‘organisation’? One practical approach to help any management team develop an ‘abstraction or representation’ to capture their socially negotiated agreement about bundles of social practices as their basis of organising is the ‘business idea’ (van der Heijden, 1996/ 2005; van der Heijden, 1997).

Business Idea Fundamentals The business idea is intended to capture some fundamental aspects of the basis of organising, including (i) the ongoing scarcity in society that is being addressed by the organisation (public or private), (ii) the value created from the organisation’s resources whilst addressing such scarcity, and (iii) the distinctiveness or uniqueness of the social practices developing and evolving over time, if any (see Figure 5). Scarcity addresses the unfulfilled needs of society, which are evolving in the light of unfolding social circumstances. Society will be willing to pay for products or services that en-

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ongoing change and sensemaking

scarcity in society

distinctiveness or uniqueness

the value created addressing scarcity

practices, processes, and recurring patterns Figure 5: Fundamentals of success.

hance their life circumstances. It is vital that the ‘organisation’ can stand out from the crowd of other (potential) providers; otherwise the product or service will be or become a commodity which may ultimately result in the decline of the organisation. For public sector organisations, the equivalent of scarcity would be understood in terms of the public goods being provided (that is, services that benefit all members of society collectively), civic leadership, and the related people providing public goods, and uniqueness would cover aspects that provide, gain, and maintain legitimacy and governance as well as enabling wider relationships in society.

Ongoing Change and Potentiality Ongoing sensemaking and organising helps individual managers and management teams to understand events and experiences in the unfolding and changing world, which can then help them assess to identify the emerging needs in society (i.e., scarcity). Doing so enables management to “discern the inherent potentiality always already at work in the configuration of social reality and then to allow it to unfold to our advantage” (Chia, 2014, p 19). The basis of organising is derived from practices, processes, recurring patterns, and actions, intended and unintended, that emerge over time from day-to-day activities. Knowledge and understanding of these practices, processes, and recurring patterns are likely fragmented across a management team, tacit in nature, and subject to an individual’s role in the organisation. Consequently, moving from equivocality to unequivocality requires time, patience, and a willingness to have ideas constructively challenged. The next section explores a practical example.

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Kinder-Care Learning Centres, Bundles of Social Practices, and the Business Idea Bougon and Komocar (1990) discussed the example of Kinder-Care Learning Centres which were founded in the 1960s by the entrepreneur Perry Mendel. Mendel recognised that work patterns and social norms in society were changing and increasingly moving towards mothers returning to their workplace; previously this was socially understood as dual income, no kids (DINKs). In addition, single mothers were increasingly returning to their workplace or finding new employment. What would happen to children of these families? Who would look after the children? Why would parents ‘give’ their children to a ‘stranger’ to look after them? Why would parents pay Kinder-Care to look after their children? Beyond increasing the collective family income, or individual income, what would parents gain from Kinder-Care? Professional/ management/ financial resources Land/buildings Retention ex-teachers Innovative childcare

Revenue

Teacher satisfaction

Reputation

Parents’ good feelings Working parents

Pay for service

Parents’ financial resources

Figure 6: Kinder Care Business idea.

Recognising this unfolding situation, the emerging societal change was centred on married mothers returning to the workforce or single mothers looking for employment, and the lack of a safe and nurturing childcare facility, Mendel launched his first Kinder-Care Learning Centre in Montgomery, Alabama, in 1969. He located this centre near a residential housing area to make it easier for parents to drop off their children on the route to their workplace. He recruited experienced teachers who were interested in and focused on the processes of learning, education, and ensuring the development and well-being of the children. The teachers experimented with ways to innovate and improve the learning, education, and well-being of the children, as they were not bound by the wider formal educational system. Mendel also created

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a centralised management and financial system to reduce the burden of administration on teachers. Doing so provided the time and space to experiment and innovate. These activities built and enhanced Kinder-Care Learning Centre’s reputation and the business grew and developed over time. From this summary we can depict the interaction between the social and the material settings (Figure 6). When we consider and analyse the Kinder-Care Learning Centres further, we can identify the bundles of social practices, routines, and activities that explain its success. For example, within innovation in childcare practices we can see bundles of social practices featuring the ongoing communication, interaction, and exchanges between teachers that enabled and created innovation in childcare; the bundles of social practices featuring interactions between teachers and parents that highlighted and communicated the importance of innovative childcare, which resulted in the development and underpinning of Kinder-Care’s reputation; and the development of this reputation that also made it possible to retain experienced teachers as they were motivated to continue to experiment and innovate in teaching practices; we also see the interactions and meshing of bundles of social practices and material arrangements creating time and space that also helped retain teachers and their knowledge and expertise within Kinder-Care. All of these bundles of social practices and meshing of interactions with the material arrangements reveal the basis of Kinder-Care organising. The challenge for any individual and management team is to comprehend the bundles of social practice and how they interact and mesh with material arrangements within their ‘organisation’ to form their business idea. In addition, they can consider and analyse the interactions, relationships, and practices that connect the ‘organisation’ to and with its wider contextual setting. Mendel recognised and was careful to manage the basis of organising over time. He recognised the important dynamics related to teacher satisfaction and continual innovation in childcare which was central to addressing the unfolding needs in society. By addressing the needs of society Kinder-Care was able to create value for both the business as well as for society. The value created, both financial and psychological, for society and Kinder-Care. Focusing on the bundles of social practices featuring innovation in childcare practices it is possible to determine bundles of social practices of communication, with teacher relational talk and shared conversations involving sharing tacit knowledge, sharing ideas, providing feedback to each other, and acting on insights from these conversations. The bundles of social practices around teacher collaboration were fundamental to the sharing of knowledge and experimentation. In addition, we also can determine collaboration practices with parents, and how such social practices reinforce the interactions between teachers and parents contributing to the retention of teachers. By doing so knowledge and experience was retained within Kinder-Care. These bundles of social practices proved difficult to emulate and are key to the Kinder-Care basis of organising (Figure 7). Analysing Kinder-Care further, Mendel recognised the nature of the dynamic relationships between social actors

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Level of shared & explicit knowledge Level of experimentation

Level of Communication

Retention ex-teachers

Culture of collaboration

Innovative childcare Teacher satisfaction

Parents’ good feelings

Teacher/parent interaction

Figure 7: Kinder care bundles of social practices.

and their practices and worked to remove or minimise administrative duties that would impact the ability to innovate. Identifying micro-practices that underpin bundles of social practices is a key requirement to understanding the process of organising. This requires an understanding that ‘organisation’ “lies in the complex, sinuous interlocking of its component bundles” (Schatzki, 2005, p 478). These practices will evolve over time, because of purposeful and purposive actions, actions that have intended as well as unintended outcomes. Practices are not static, evolving continuously, even if managers are unaware of such evolution. In addition, interactions with the changing world shaped the practice-activities of Kinder-Care and, more generally, will shape the practice-activities of any organisation regardless of its size or setting. “All human coexistence inherently transpires as part of practice-arrangement meshes” (Schatzki, 2005, p 473). The key is to identify them as part of dialogue, exchanges, and strategic conversations. Making sense of the changing world with scenarios and understanding insights that generate foresight underpins the basis of organising.

Strategic Conversations and Flux and Flow Why are strategic conversations important? The argument put forward in this chapter is that ‘organisation’ emerges and stabilises through talk and conversations, then “organizations can no longer be seen as objects, entities, or ‘social facts’ inside of which communication occurs. Organizations are portrayed, instead, as ongoing, and precarious accomplishments realized, experienced, and identified primarily, if not exclu-

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sively, in communication” (Cooren, Kuhn, Cornelissen, and Clark, 2011, p 1149). This is an important definition as it identifies that (i) ‘organisation’ is socially negotiated order through talk, (ii) (organisational) boundaries are non-existent, and (iii) organising occurs in the flux and flow of an ever-changing world. Which manager has the job description ‘manager of socially negotiated order’? The CEO? The CEO in isolation? Or is it every manager or no one? If ‘organisation’ is socially negotiated, then systems and structures are an illusion and counter-productive to making sense of the ever-changing world. If boundaries are non-existent, it is important to recognise that events and experiences are the bedrock of making sense of the ever-changing world. Such events and experiences or not linked chronologically or causally connected. Linking, connecting, and relating events and experiences is about the “creative search, incessant experimentation, the regular transgression of social norms and institutional boundaries, and the imaginative reconfiguring of sources of potentialities into resources and productive outcomes” (Chia, 2008, p 27). Such a process is considered as ‘relevating’ (Paton, Chia, and Burt 2014), whereby connecting “the seemingly irrelevant and hence hitherto unthought opens up the possibility for new and creative ways of responding in the unfolding world” (p 272). Relevating “peripheral and non-local happenings enables a progressive expansion of strategic awareness about how the organisation’s future can be affected by seemingly remote, ‘outlier’ events that are able to trigger major disruptions, discontinuities and surprises for the organisation” (Paton, Chia, and Burt, 2014, p 282). Organisational boundaries are central to the entitative approach, which is based on a Cartesian duality. From an organising perspective “an individual system is never self-contained but are continuously influenced by the behaviour of other – largely unconscious – parts of its own system, by its own history of previous behaviours and their effects, and by its being woven into other human, social and natural systems” (Chia and Holt, 2009 p 89). Flux and flow of organising in an ever-changing world requires an acceptance that emergent behaviour occurs where dynamic interactions and interconnectivity between human agency and non-human agency create unpredictable processes, events, and experiences (Chia, 2019). Accepting flux and flow as the natural order of the world challenges the traditional modes of analysing the contextual environment. Accordingly, it is important to recognise that the ever-changing world does not come neatly packaged, nor does it arrive by email or announced via various media channels. It is messy. It is ambiguous. It is complex. Weick (1995) helps us understand such limitations when he states that “there is not some kind of monolithic, singular, fixed environment that exists detached from and external to people. Instead, people are very much a part of their own environments. They act, and in doing so create the materials that become the constraints and opportunities they face. There is not some impersonal ‘they’ who puts these environments in front of passive people. Instead, the ‘they’ is the people who are more active” (p 32). Understanding the changing

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world is socially negotiated order requires a focus on ongoing engagement and management of interpersonal exchanges, talk, dialogue, and strategic conversation. These issues are consistent with the approach adopted in this book and are consistent with the idea of the ‘impermanent organization’ (Weick, 2009, p 3). Weick (2009) states that “organizing, viewed as an emergent unpredictable order, replaces a distinctive, stable self as the actor with dynamic relationships as the actor” (p 7). This will require a radical reorientation of thinking by managers and management teams, from managing systems and structures to managing talk, dialogue, and conversations. Chapter four will develop this reorientation in more detail, where in-depth case studies are presented.

SWOT Analysis as the Traditional Mode of Capturing Aspects of the Organisation and its Contextual Environment For many managers the traditional mode of discussing and analysing their ‘organisation’ is by using the strengths, weaknesses, opportunities, and threats (SWOT) framework, which is a taxonomic device to list ideas that are perceived as organisational strengths and weaknesses and external opportunities and threats. If we consider the issue of organising, does the random listing of strengths help? Does the random listing of weaknesses help? Whilst it may help to create a platform for exchange of ideas and communication between individuals, it does not help in identifying connections and relationships between ideas. In addition, if we use the ‘iceberg’ metaphor, those ideas listed are likely to be superficial issues, that is, ‘the ten percent above the visible surface water’. The true meaning and significance of those ideas are likely to be ‘below the surface water’ and are likely to be hidden and yet to be revealed. The random listing of ideas does not necessarily lend itself to the identification of the changing nature of scarcity in society, the value created from the organisation’s bundles of social practices whilst addressing scarcity, and the distinctiveness or uniqueness, if it exists, and how it develops and evolves over time. Strengths are likely to be relevant and useful if they help to support an understanding by the management team of the basis of organising. Does the articulation of strengths lend itself to the identification of bundles of social practices? Likewise, do individual ideas about opportunities and threats help in the ongoing sensemaking process? There is (usually) a lack of any explanation of the emerging order within which individuals make in their statements about opportunities and threats. Opportunities are often hidden cries for help within an organisation. The opportunity may be possible or illusory. The opportunity may be a suggestion to avoid dealing with the ‘real’ and complex challenge facing a management team. Where a weakness or threat is recognised, and a solution proposed, does it address the underlying issue or the more deeply hidden, unspoken threat? When thinking about and articulating opportunities and threats they are unlikely to be linked to events

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and experiences that occurred in the past. Opportunities and threats are likely to be isolated in time and space, without any connection to trends and patterns over time. Consequently, there is also likely to be a wide divergence of opinion between individuals on the relevance, importance, and significance of opportunities and threats, as well as the implication or consequence for their organisation. The SWOT analysis does not provide an adequate platform to have a wider exploration of events and experiences that are implicit in ideas or issues that are captured in one of the taxonomic categories. If we recognise the limitations of the SWOT analysis framework, and by using the SWOT analysis, is a management team avoiding exploring the yet-to-be-articulated issues pressing on them? Is it possible to derive foresightful insights from the random identification of such opportunities and threats? Possibly, however, the constantly changing world and fragmentation of views across a management team will in all likelihood limit the role and efficacy of the SWOT analysis.

Implications for Organisational Success and Delivery of Public Goods The widely recognised foundations of success are the ‘fulfilment of the scarcity in society’ and ‘uniqueness’ (van der Heijden, 1996; 2005; Amit and Schoemaker, 1993). Simple to say, but much more complex to identify, discuss, define, and redefine to stay relevant in the constantly changing world. We need to recognise that organisation/organising will change from day to day as micro-decisions are taken in responding to the unfolding situational context, as well as operational actions in response to emerging issues and problems. These activities will keep the ‘organisation’ in a constant state of changing. The constant state of changing may not be immediately evident, and any sense of danger may not be noticed. The challenge for individuals/a management team is to look beyond their imposed boundary to understand the wider changing world and its influence on their perceived notion of organisational success or the provision of public goods. How can managers talk their organisation into life given the problems associated with the traditional SWOT analysis framework? How to arrest and stabilise the ever–changing world? How to socially negotiate and temporarily agree on the basis of organising? These questions have been troubling academics and practitioners for the last 50 years (Weick, 1969). Weick (1969) recognised that organising was a process and that a mode of “conceptualizing social systems of loops provides a theory and a method” (Bougon and Komocar, 1990, p 136) to capture the dynamics of organising. Such a dynamic conceptualisation helps to identify a “set interdependencies and the actors in a system of loops” (Bougon and Komocar, 1990, p 137) as well as highlighting the connections to the changing world. Thinking about ‘organisation’ in terms of interconnected loops to reveal bundles of social practices provides a practical approach to help managers overcome the limitations of taxonomic and hierarchical thinking

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(Bougon and Komocar, 1990). Understanding these loops as bundles of social practices meshed with material arrangements acknowledges and reveals the complex relationships and dynamics of everyday social interactions (Schatzki, 2005). The business idea (van der Heijden, 1996/2005; van der Heijden, 1997) provides a framework to create and capture a (temporary) shared understanding of the basis of organising. These issues will be explored, discussed, and developed in much more detail in the next chapter.

References Amit, R., Schoemaker, P. J. H. (1993). Strategic assets and organizational rent, Strategic Management Journal, 14 (1), 33–46. Bakken, T., Hernes, T. (2006). Organizing is Both a Verb and a Noun: Weick Meets Whitehead, Organization Studies 27(11), 1599–1616. Bougon, M. G., Komocar, J. M. (1990). Directing Strategic Change: A Dynamic Wholistic Approach in A. S. Huff (ed), Mapping Strategic Thought, John Wiley & Sons, Chichester, pp 135–163. Burt, G., Mackay, D., van der Heijden, K., and Verheijdt, C. (2017). Openness disposition: Readiness characteristics that influence participant benefits from scenario planning as strategic conversation, Technological Forecasting and Social Change, 124, 16–25. Chia, R. (1996). Organizational Analysis as Deconstructive Practice, de Gruyter, Berlin. Chia, R. (1999). A ‘rhizomic’ model of organizational change and transformation: perspective from a metaphysics of change, British Journal of Management, 10, 209–227. Chia R (2003). Organization theory as postmodern science, in: Tsoukas, H. and Knudsen, C (eds.) The Oxford Handbook of Organization Theory. Oxford University Press: Oxford; New York, pp. 113–140. Chia, R. (2008) Enhancing entrepreneurial learning through peripheral vision, in Richard Harrison and Claire M. Leith (eds) Entrepreneurial Learning: Conceptual Frameworks and Applications, Routledge, London, pp 27–44. Chia R (2014). Reflections: In Praise of Silent Transformation – Allowing Change Through ‘Letting Happen’, Journal of Change Management, 14 (1), 8–27. Chia, R. (2019) Becoming a learning organisation: A process–philosophical perspective, in: Ortenblad, A. (ed.) The Oxford Handbook of the Learning Organization. Series: Oxford Handbooks, Oxford University Press: Oxford, pp 393–404. Chia, R. Holt, R. (2009). Strategy without Design: The Silent Efficacy of Indirect Action, Cambridge University Press, Cambridge. Cooren F, Kuhn T, Cornelissen JP, Clark TAR (2011). Communication organizing and organization: An overview and introduction to the special issue, Organization Studies 32 (9), 1149–1170. Gray, B., Bougon, M. G., Donnellon, A. (1985). Organizations as Constructions and Deconstructions of Meaning, Journal of Management, 11 (2), 83–98. van der Heijden, K. (1996/2005) Scenarios: The Art of Strategic Conversation, John Wiley & Sons, Chichester van der Heijden, K (1997) Presearch, provoking strategic conversation, Scenarios, Strategy, and the Strategy Process, GBN, volume 1 number 1 Hernes, T. (2008). Understanding Organization as Process: Theory for a Tangled World, Routledge, London. March, J. G. (1995). The future disposable organizations and the rigidities of imagination Organization 2 (3–4), 427–440. March, J. G., Simon, H. A. (1993) Organizations, Blackwell Publishers, Oxford

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Maitlis, S., Christianson, M. (2014). Sensemaking in Organizations: Taking Stock and Moving Forward, The Academy of Management Annals, 8 (1), 57–125. Paton, S., Chia, R., Burt, G. (2014). Relevance or ‘relevate’? How university business schools can add value through reflexively learning from strategic partnerships with business, Management Learning, 45(3) 267–288. Schatzki, T. R. (2005) The sites of organisations Organization Studies 26(3) 465–484. Weick, K. E. (1969). Social Psychology of Organizing, Addison–Wesley, Reading, MA. Weick, K. E. (1995). Sensemaking in Organizations, Blackwell, Oxford, UK. Weick, K. E. (2009). Making Sense of the Organization: The Impermanent Organization, Volume two, John Wiley & Sons, Chichester, West Sussex. Weick, K. E. (2020) Sensemaking Organizing and Surpassing: A Handoff, Journal of Management Studies, 57 (7), 1420–1431 Weick, K. E., Sutcliffe, K. M., Obstfeld, D. (2005). Organizing and the process of sensemaking, Organization Science 16 (4),409–421.

Chapter 4 Strategic conversations, scenario process, and reframing business idea Imaginations of the future, like imaginations of the past, are devices for living in the present (James G. March, 1995, p 427) In order to grasp, it is necessary first to release. (Lao Tzu in Chan, 1963, p. 157)

Introduction This chapter sets out the background of the four organisations participating in various longitudinal research projects, as well as discussing the impact of the scenario process. The three private sector organisations were in different industry sectors. The first organisation is operating in the Scotch whisky and spirits sector (referred to as CBC); the second organisation operates in the IT consulting sector (referred to as CLCS); and the third organisation is operating in the pulp and paper sector. In addition, the third organisation invited its largest customer to join the research project (referred to as CP+IPC). The participating private sector organisations varied in size including people employed and turnover, which underpins the diversity of the research. In addition, an organisation from the public sector is also presented (referred to as PRBV); it is involved with network rail systems and is presented to show the relevance of scenarios in the public sector. The rationale for four case studies is to prove the power of scenarios to challenge thinking and help redefine the organisation. The four case studies are slightly different, in settings and outcomes. The first two really prosecute the case for scenarios. The third case reframes context but CP being a large paper manufacturing business found it difficult to reframe itself. However, they saw the inevitable change in the landscape before it happened and were able to strategise ahead of the competition. The fourth case study is set in the public sector, to demonstrate the relevance of the scenario process, regardless of the setting. It also demonstrates the power of fragmentation between organisational members and how the scenario process enabled them to negotiate and move away from the approaches of the past (i.e., the blueprint), which they recognised were likely to fail due to the fast-changing nature of technological innovations. This is the longest chapter in the book, and it can be read in its entirely, or it can be read case by case. The chapter will provide in-depth materials from each of the organisations participating in the research projects. These in-depth materials will cover interviews will all participants, prior to the commencement of the research project as well as interview after the conclusion of the research project; outcomes from the various scenario prohttps://doi.org/10.1515/9783110792065-004

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cess workshops, including presentation materials; there will be in situ statements made by the participants, and discussion of these statements, made during the various scenario process workshops; and there will also be comments made by ‘key informants’ (from the participating organisations) outside of the various scenario process workshops. Once the materials from all the organisations participating in the research projects are presented there is a discussion of the significance and impact of the scenario process on each organisation. The intervention highlights the impact on each organisation, with insights emerging about their changing world which had not previously been detected. Such insights, from the scenario process, were generated by and from the participants’ discussions, conversations, exchanges, and debates as they worked with the ambiguity of the situation that concerned them at the outset of the research project. Interestingly, in three of the organisations, the scenario process helped them understand ‘the propensity of the moment’ (Jullien, 1995) which they had previously been unaware of. In the fourth organisation the insight is about the disposition of the management team, around the dilemma of the need for certainty against the willingness to experiment and adapt. From these insights, foresight from the scenario process emerged in the present – ‘the here-and-now’. This is the first time that foresight in the here-and-now is a key feature of the scenario process. Traditionally the focus is on the future and how to prepare for it. For each organisation there is a discussion on how the participants coped with the outcomes of the scenario process. Their coping will be discussed in two parts. First, in this chapter the discussion focuses on the process of reframing the organisation arising from the insights from their strategic conversations. Reframing involves “changing the conceptual and/or emotional setting or viewpoint in relation to which a situation is experienced and place it in another frame which fits the facts of the same concrete situation equally well or even better, and thereby changes its entire meaning” (Watzlawick, Weakland, and Fisch, 1974, p 95). The insights resulted in a new definition of the ‘organisation’, and the process of organising in the unfolding context by the management teams. The second focus is on the individuals and the management teams and their coping capabilities during the strategic conversations and this will be discussed in chapter five. However, it is argued that such coping is understood as negative capability, which is a fundamental aspect of engaging with ambiguity, uncertainty, and the process of reframing and managing strategic change. Negative capability is about finding and encouraging “precisely the ability to tolerate anxiety and fear, to stay in the place of uncertainty in order to allow for the emergence of new thoughts or perceptions” (Eisold, 2000, p 65). Negative capability requires individuals and management teams to refrain from compulsive action, to refrain from quick-fix solutions, to disregard pre-made solutions, and to avoid the temptation of dispersal actions that avoid dealing with the insights from their thinking and exchanges. “Negative capability offers the potential to reshape this creative impulse and thereby enable the individual/manager to guide the change process as it

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emerges, rather than attempting to simply control recycled solutions and their ill-fitting outcomes” (von Bulow and Simpson, 2022, p 32). Negative capability may seem to have unattractive connotations or be a clumsy idea; however, the characteristics inherent include: (i) restrained tolerance to live with ambiguity when confronted with challenges where the answer is not immediately obvious; (ii) ability for openness when there is multiple new, and potentially contradictory, ideas and possibilities; (iii) continual attentiveness to events and experiences as they occur until clarity emerges; (iv) patient absorption of novelty that potentially challenges assumptions; and (v) refraining from short-term (reactive) actions. These characteristics will be discussed in the next chapter. Next, we present the case organisations and their experiences during the scenario process.

Case study 1 – CBC Scotch: Whisky and Spirits Sector Background CBC is a whisky and spirits full production business, with activities including blending, bottling, storage, distribution, and brand management of Scotch whisky and other spirits. CBC is part of a wider group of companies, which was formed in 1861. More than ten years prior to the establishment of the whisky company, the founders were active initially as wholesalers of spirits and a few years later in importing wine from France and gin from Holland. Their first distillery was commissioned in 1881 on the island of Islay. CBC was formed in 1937. Today the major shareholder is a Trust, formed in 1961, which is the largest independent grant-making Trust in Scotland. The Trust’s vision is built around the creation of a fair and compassionate Scotland where everyone is valued and able to flourish. The Trust has four themes that it supports: Education Pathways, Financial Security, Work Pathways, and Emotional Wellbeing and Relationships. At the time of the research CBC annual accounts were incorporated into the group accounts, with a group turnover of £96m. In addition, the subsidiary which ultimately formed the Trust has a turnover was £11m. In 2021 the group turnover was £575m, down 15% from the previous year, due to COVID-19. However, CBC operations were fundamental to supporting the success of the group. The group changed its name and restructured its various subsidiaries in 2022.

CBC Management Team The management team included the Chief Executive, the Operations Director, the HR Director, the Financial Accountant, the Quality Manager, and the Operations Manager. In addition, to the core team, CBC added two additional participants. CBC appointed a Business Development Manager prior to workshop two and he participated in all the

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scenario process workshops. CBC invited the Group Marketing Manager to participate in workshops two and three. The interview data was shared with both individuals prior to workshop 2.

Workshop Schedule The first workshop was designed to provide an opportunity for the participants to hear, digest, and discuss the themes from the interviews. They would then agree on the scenario agenda and develop an initial representation of the organisation in the form of a ‘business idea’. The first workshop was of one-day duration. The second was a two-day scenario-building workshop. The participants reviewed and agreed on the previously discussed scenario agenda prior to commencing the workshop. The workshop covered the key uncertainties for them, from which they developed a set of scenarios. The third workshop was designed to explore the implications of the scenarios as well as reflect on the significance of their thinking. Each of these workshops is described in more detail below, with key insights from the workshops presented and discussed in detail. The agreed total lapsed time for these three workshops was twelve weeks, with four days of workshop time. In practice there were some small changes to accommodate unplanned organisational issues. However, the overall time schedule was not greatly impacted and there was no loss of continuity between the workshops.

Research Approach and Data Collection and Analysis There was a wide variety of data collected during each of the scenario-based research projects. These included one-to-one interviews at the outset of the research project; one-to-one interviews at the conclusion of the research project; observations made during the three workshops including the recording of ‘critical incidents’ with followup conversations on the critical incidents with the individual making the comment; all outputs from the three workshops including the business idea, scenario storymaps, scenario implications and insights, and all related flipcharts created during each workshop were recorded. During each workshop verbatim notes, comments, observations, and reflections were recorded in research field books. As noted above, there were three workshops designed into each of the research projects. Workshop one was designed to provide feedback on the themes from the interviews to all participants. An interview report was provided to all participants. Participants were invited to comment on the themes as well as the statements from the interviews. The comments were primarily focused on clarification of any point/comment and were not designed to amend the originator’s comment.

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Interview Process and Related Activities For each of the participating organisations all members of the management team were interviewed one to one and face to face. Each interview lasted one hour and thirty minutes; hand-written notes were made throughout the interview, which were validated by each participant during the interview. The open-ended interview process was guided by the established common interview approach (Amara and Lipinski, 1983) which was augmented by several additional questions (van der Heijden, Bradfield, Burt, Cairns, and Wright, 2002). The interviews were subsequently typed and transcribed verbatim as soon as possible after each interview. Upon the completion of all the one-to-one interviews, they were analysed to identify the themes that emerged and discussed during each interview. Once the themes of each interview were identified, a Post-it note exercise was conducted (by the researchers) to create an over-arching framework which enabled the interview comments, across the participants, to be allocated to the framework. The themes as well as the interview statements were anonymised. By doing so it was possible to present the range of views, similarities, and differences and contradictions. Once the interview discussion was finished two additional activities occurred during workshop one. During the first activity the participants discussed and agreed on the focus of the scenario workshop, which followed shortly afterwards. In the second activity the participants developed the business idea for their organisation. Doing so had a double purpose. First, to help them build consensus about the strategic nature and activities of the business. Second, to provide an opportunity to reflect on the business idea throughout the remainder of the scenario process.

Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea Interview Feedback The interviews were written up fully and presented in a report, which was provided to all participants at the outset for workshop one. There were six major themes: (i) industry environment, (ii) CBC organisational characteristics, (iii) opportunities, (iv) threats/vulnerabilities, (v) marketing, and (vi) production. The report was slightly over thirty pages in total. The split across the six major themes was: (i) industry environment – 3.5 pages, (ii) CBC organisational characteristics – 8.5 pages, (iii) opportunities – 10.5 pages, (iv) threats/vulnerabilities – 1.5 pages, (v) marketing – 3 pages, and (vi) production – 3.5 pages. The split between internal issues and external issues was 15 pages and 15.5 pages, respectively. A summary of the interview data was presented and recorded on thirty-two flipcharts, which were hung on the walls throughout the workshop. The ambition for CBC was to double the production of five million cases of

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whisky and other spirits to 10 million cases within (the next) five years. It was expected that most of the growth would be from Scotch whisky products. The industry environment covered whisky markets, other spirits markets, competitors, restructuring, and key success factors. The CBC organisational characteristics covered Group relations, CBC organisation, CBC culture, and CBC people. The opportunities covered business opportunities, opportunity limitations, the offering, business development targets, relative position, and partnerships. The threats/vulnerabilities covered main accounts, health, environmentalism, and disasters. Marketing covered approach, research, profile, pricing policy, margins, and rate of return. Production covered capacity, investments, cost, and efficiency. Here are a few exemplar verbatim comments and exchanges between the participants that occurred during the interview feedback workshop: Exchange 1 – Overall initial comments on interview report “The weight of the data interesting. Vulnerabilities is less than I expected.” “Does that tell you anything?” “It is healthy.” “Or maybe it is complacency.” Exchange 2 – Concern about product commoditisation and rationalisation of the industry “We tend to be reactive to the market.” “Brand companies have lots of data that is not available to us. We would be reactive to commoditisation, moving bottling overseas”. “The EU position is about bottling in the country of origin. We have sterile data, for example, monthly reports on exports that lack qualitative data”. “We are not close enough to the marketing companies”. Exchange 3 – Production and Investment “What do we do with stock levels? Minimum stock levels or variety and choice?” “Are we capable of fast production or do we charge appropriately for stock holding?” “Coping with instant demand is normal”. “Choice of investment is not easy; peaks are getting peakier and that impacts stock level. Investment in machinery to only use during peak periods?” “We don’t have control of the whole process and we are financing stocks”. “The high level of stockholding is to respond to fulfil short notice requests from supermarkets within twenty-four hours”. “Do we bottle to order or bottle to forecast?” These exemplar comments highlight the dilemma that CBC was facing at the time, and resolution would impact their future – low-cost production or flexible production. Exchange 4 – Developing pricing policy “We need to develop our pricing policy”.

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“Do we have open book pricing, or marginal pricing, or off-peak pricing, or pricing for small batch or speciality whiskies?” “For a brand with large demand we need long run production, which makes it difficult to change the pricing policy”. “To develop a new customer or brand, we would need to agree a formula pricing policy”. Again, these exemplar comments highlight the dilemma that CBC was facing at the time, and resolution would impact their future – low-cost long production run pricing or flexible pricing policy. Exchange 5 – Development targets “What is our strategic approach? It’s a chicken and egg situation. Build capacity first or get the business in first?” “Get the business first then solve the problems, but operations do not think we are ready yet”. “Planning growth whilst recognising the physical constraints. We need to take more control over our destiny”. “Do we have a doubt in our mind that we could handle it?” “What type of growth do we go for? We need to anticipate growing pains”. “How will we achieve a doubling of cases to support growth?” “There are enormous barriers to overcome. If we are talking purely whisky that will exacerbate the situation”. “What if we target a company with 5 million cases, would that result in competition for existing brands?” “What kind of facility do we need to cope?” Whilst there was limited discussion on vulnerabilities there was considerable discussion on (how to capture and manage) growth. The exemplar comments highlight another dilemma that CBC was facing at the time, and resolution would impact their future – invest and expand facilities before new business or gain new business then invest and expand facilities? Dilemmas are a sign of the (unresolved) strategic issues facing any organisation.

Scenario Agenda At this juncture the workshop stopped for lunch. After lunch the next stage was the development and agreement of the scenario agenda, which was followed by a discussion to develop the business idea. The process to develop the scenario agenda was an open-ended idea generation approach to issues and concerns held by the participants. These could be stimulated by the interview feedback and/or could be new issues or concerns. These issues and concerns were recorded on Post-it notes, placed on flipcharts, and subsequently clustered into higher-level issues and concerns, to form key

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scenario agenda themes. These were the participants’ key concerns and uncertainties and would be the starting point for the scenario-building workshop. Forty-eight issues and concerns were identified by the participants. As one participant commented: “It’s like a jigsaw puzzle”. Undaunted they proceeded to cluster these issues and concerns. During the process they offered a variety of views on the clusters. Questioning if an issue or concern would fit into another cluster. The participants worked together, discussing and connecting ideas together, and building consensus about the emergent clusters. The emergent clusters were titled: (i) Industry Structure (covering uncertainties about acquisitions and consolidations, bottling in Scotland, amongst other issues); (ii) Demand and Demand Drivers (covering consumer attitudes and lifestyle changes and effects); (iii) Distribution Structure (covering ownership of distribution systems, levels of stocking holding and replenishment, and knowledge on consumer attitudes); (iv) Technical Developments (covering whisky aging, market attitude to ‘marrying’ blends, advances in bottling technology); (v) Trends in Presentation (packaging materials, packaging for differentiation, industry approach to promotion); and (vi) Relative Labour Costs (covering employment trends and skills development, EU relative labour cost, employment costs, and adoption of social chapter).

Business Idea Once the scenario agenda was agreed on the participants discussed the nature of their business and its related activities. These activities included their skills, knowledge, operational assets and capabilities, competitive advantage, and the basis of creating value for customers. Their thoughts and ideas were captured on flipcharts to help them develop a visual representation of the business. The visual representation aided and enabled them to discuss, reflect, negotiate, and build a shared understanding and agreement on the current basis of organising. The key aspect of organising was a customer-oriented approach to delivering a quality and reliable service. If there were any issues delivering a quality and reliable service, arguing that they possessed the know-how and technical skills to solve any problem quickly. A flexible mindset and flexible production systems also underpinned the delivery of a quality and reliable service. When you read and review the interview exchanges above, it is possible to discern that their approach revealed a number of dilemmas, including: – Reactive or proactive management approach to the future – Proactive approach to new customer acquisition or a reactive approach based on ‘word of mouth’ selling – Invest and build capacity or better utilisation of existing plant including introducing shift working – Bulk whisky growth or brand growth

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Produce for stock or produce for customer orders (at short notice) Production lines for products or production lines for customer orders

These dilemmas were unresolved at the outset of the remainder of the scenario process and help explain the confusion and uncertainty faced by the management team.

Education, communication, continuous improvement

Flexible production system

Information system

Investment

Flexible mindset Customer team structure Know-how Technical skills

Surplus

Customer orientation

Standing reputation

Quality, reliable problem-solving service Profitable business contracts

Independence Group link

Financial credibility

Figure 8: CBC original business idea.

Workshop Two – Scenario Building Two new participants joined the workshop, the recently appointed Business Development Manager and the Group Marketing Manager. In addition, two invited ‘remarkable people’ participated in the workshop. One to bring outside knowledge about the role of technology to redefine business processes, and the other to bring outside knowledge on marketing trends. At the outset of the workshop some ground rules in terms of the scenario process were established. After welcome and initial introductions CBC participants commented: “There is an air of anticipation”. “It’s a bit of a mystery”. Throughout the presentations by the ‘remarkable people’ there were signs of attentive and thoughtful listening by the participants. The ‘remarkable people’ referred to the interview report and raised challenging issues and questions for the participants, which were discussed openly. Following on there was significant and in-depth questioning of the ‘remarkable people’ on issues contained in their presentations for clar-

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ity, exploration, discussion, and some friendly ‘banter’ including some laughter, between the participants. Throughout the participants were disciplined, courteous, and listened intently.

Developing Scenarios The participants moved into idea generation, from their initial interviews plus the ideas introduced by the ‘remarkable people’. The participants generated fifty new ideas, and these were then clustered. The clusters were: (i) future trends of consumption overseas, (ii) distribution and control of market access, (iii) consumer ownership, (iv) complexity of the offering, (v) industry structure, (vi) nature of customer service, and (vii) definition of Scotch whisky. The participants then discussed and agreed on the scenario axis. The axis was based around two critical uncertainties: (i) the industry logics (to understand the unfolding inside/outside logics and competencies) and (ii) the nature of the customer buying mode. This resulted in the scenario logics, given as follows.

Figure 9: Scenario structuring matrix.

The two scenario dimensions were: the nature of customer and distribution systems and service – (i) as is and (ii) re-configured with co-production; the nature of the industry logics – (i) industry logics as is and (ii) industry logics and competencies reconfigured. Resulting in four scenarios.

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Producer World

Provider World

Business as usual

Distributor World

Figure 10: Developing scenario titles.

(i) ‘Business-as-Usual’ (combining customer and distribution systems and service as is with industry logics as is) (ii) ‘Producer World’ (combining customer and distribution systems and service as is with industry logics and competencies reconfigured) (iii) ‘Provider World’ (combining industry logics and competencies reconfigured with customer and distribution systems and service reconfigured with co-production (iv) ‘Distributor World’ (combining industry logics as is with customer and distribution systems and service reconfigured with co-production) The participants were then allocated to one of the scenarios, tasked with developing the scenario story that linked the past to the present to the future state ten years ahead. These three scenarios challenged the participants’ deeply held assumptions about their business, the Scotch whisky industry, the relationship with customers, technological innovation, and known and soon-to-be-known non-industry stakeholders. There were also significant conversations around a whisky bubble, brand ownership, consumers and consumer behaviour, data analytics, and authenticity and industry standards. The participants agreed that there was no need to develop the ‘Business-as-Usual’ scenario, as this was continuity of existing structures, systems, and relationships. However, it was possible for the ‘client’/participants to see their ‘surprise-free’ world, how it unfolded, and how it was unfolding and alterative worlds that were hidden from them. The ‘surprise-free’ scenario “represents the common traditional wisdom of the organisation, a scenario based on the expected future, which can anchor the set of scenarios in the existing belief system of the decision makers. This ‘link with the old world’ serves as a basis for recognition of change” (van der Heijden, 2005, p 270). The ‘surprise-free’ scenario is considered as continuity on achievement of organisational aspirations about future growth, and not to be confused with the continuity and no change in ‘business-as-usual’. For CBC the ‘surprise-free’ scenario was ‘Pro-

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ducer World’, which was based on the long-held belief that ‘whisky is king’ and could not be undermined or threatened in the future. Whisky was their understanding of the scarcity in the marketplace. However, what emerged was a realisation that ‘information is king’ (currently and more so in the future). Once the participants understood the implications of their own thinking, they began to comprehend the limitations in their thinking, as well understanding the unfolding world. The original reason for undertaking the scenario project was to understand the opportunities in the wider international drinks market. Expansion internationally would be based on ‘whisky is king’. The underlying problem of innovation in technology wrestling away control over the scarcity was hidden from the management team.

Scenario Summaries The ‘Producer World’ is based on accelerating growth in exports to the new emerging markets of Brazil, Russia, India, and China. These are large markets, with growth in consumer disposal income, with a doubling of world demand for Scotch whisky. Such growth in demand outstrips the industry’s capability to produce given the maturation process requirements. While new capacity is brought on stream this does not add to supply for several years, during which demand increases further. Because of this dynamic and the length of time required for additional whisky to mature, Scotch whisky develops an aura of something precious which increases demand. Producers have power, especially those with distillery capacity. Non-producing companies with significant stocks of Scotch whisky do well for a period; however, they falter as stocks are depleted. Investment in distilleries reaches a new all-time Increasing shift to other drinks in UK market

Fast rising exports to Asia and Russia

Favourable conditions in whisky markets

Ongoing growth in demand

Increasing recongnition of Scotch

Figure 11: Producer World overview.

Scotch priced at a premium

Over-expansion by newcomers

Glut sets in in 2006

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high. Acquisitions of non-producing companies, to protect stocks, leads to the industry restructuring. Fewer, bigger businesses dominate. In the ‘Distributor World’ worldwide demand for Scotch whisky is static and growth over the period is disappointing. In the home market slow-down of economic performance and changes in attitudes to drinking reduces demand. A worldwide recession results in the reversal of freeing trade agreements, resulting in economic blocs that are protectionist in nature. As a result, the Scotch whisky industry suffers from over-capacity and profit performance is poor. This leads to restructuring in the industry, with a few well-balanced competitors. As recession continues, cost of products becomes the overriding concern of consumers. Large distributors consolidate systems, and large super-/hyper-marketeers offer low prices through commoditisation, as both benefit from economies of scale. Scotch whisky is increasingly sold through these channels as ‘buyers-own-brands’, resulting in these powerful players increasingly becoming monopoly owners of consumer information, reinforcing their market power. Eventually Scotch whisky producers have little alternative to sell through these channels, with ‘buyers-own-brands’ resulting in the distributor becoming the brand.

Trading blocs shut out exports to Asia

Scotch whisky demand declines

Traditional industry become sub-contractor

Severe world-wide recession

People buy from cheapest source

Emergence of mammoth distributor chains

The distributor is the brand

Lock-in Distributors monopolise market/customer data Figure 12: Distributor World overview.

In the ‘Provider World’ demand for Scotch whisky is static as a consequence of alcohol health awareness, and market forces gradually subordinate Scotch whisky to a general lifestyle choice. Technological innovation facilitates new ways of communication between companies and consumers. A new type of player in the industry responds to broadening brand image from specific drinks, especially Scotch whisky, into broader lifestyle images. A consumer is increasingly seen not just as someone who consumes (e.g., destroys value) but who, in the act of consumption, actively produces value for him/herself. The image is of the supplier and the consumer co-producing value. These

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new suppliers become known as ‘lifestyle providers’, concentrating entirely on selling value to the image-conscious consumer, with the specific product sold being selected, designed, and included entirely for that purpose. Spirits (and Scotch whisky in particular) continue as powerful image instruments, and the providers use these by unbundling traditional drinks offerings and re-bundling these into lifestyle packages which have enhanced value appeal. A new concept develops known as ‘designer Scotch’ which illustrates the new dynamic nature of the product. Traditional distribution, packaging, and presentation are superseded by new approaches, which are much more customised to the values of the specific consumer population groups. Customised deliveries into the market become increasingly complex and dynamic, and storage/packaging plants become sophisticated computer-controlled flexible units which can respond to short-term fluctuations in demand and product specification.

Demand drivers for whisky reach saturation

Traditional industry in decline

Traditional industry becoming sub-contractor

Quantum jump in plant investment intensity

Emergence of “providers” (lifestyle integrators)

Whisky becomes part of lifestyle industry

Technology allows intimate customer contact Figure 13: Provider World overview.

Insights and Implications Here are a few exemplar comments and exchanges between the participants that occurred during the scenario-building workshop: “We have the wrong mindset; we think production and United Kingdom”. “I am depressed, we are being stuffed by our customers. We are locked into the risk of our customers”. “We give value. We create value for others. We take a worthless product and create value in the process. How do we change?” “I am comfortable with sixty per cent of this. We react to opportunities. We need to develop a more proactive approach”. “We have discussed a wide range of issues yesterday and today. We are opening up to a business we think we know about. We are thinking about it differently”.

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The comments highlight the realisation of the limitations of their understanding of their business in a changing world. How will they cope? Subsequent comments and exchanges between the participants highlight the desire to avoid dealing with their insights and fall back to known assumptions and beliefs: “Consolidation is not about selling Scotch whisky. I just put that forward as an option”. “Our mission statement is about blending whisky”. “We need to open up our horizons on international marketing”. “This has challenged my thinking, marketing is not about needs, it’s about creating value. That has blown away my ten years of previous experience”. Then the first seeds of change within the participants emerged as the scenariobuilding workshop was coming to a close: “Do we need to tear up the group and our mission statements?” “Do we respond to direct ordering placed with us, and supplied by sister companies and partners?” “My mind is blown by this; do we need to find Christmas in the middle of July?” “The Distributor World is disturbing for us, with events out of our control. It is happening today, what are our counter-balancing forces?” “The exercise has crystalised that access to the market is critical. New product development seems like a waste of time”.

Workshop Three – Strategic Implications Following an incubation period, the participants re-grouped to review the business idea and the scenarios and discuss a way forward. The initial phase of the workshop was a recapitulation of the outputs from workshop one and workshop two. Here are a few exemplar comments and exchanges between the participants that occurred during the strategic implications workshop: Exchange 1 – Recognition of internal pressures “One issue has come into focus for us. Flexibility in production as it uses up more of the plant”. “Certain areas have pressures, and we need investment to maintain them”. “We have discovered pressure with a customer orientation, more business reduces flexibility”. “In the last eight months production has increased by fifty percent, pressure on everything and we have had to recruit temporary employees”.

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Exchange 2 – Challenge of customer orientation “The business is out of balance. It is corrupted by changing circumstances of customers. Our teams have a relationship with the brand owners. Our teams have internal loyalties. We appear to have a dual-purpose management structure”. “There have been cyclical issues in the past and there will be cyclical issues in the future. We need to be light on our feet”. “The ‘Distributor World’ is the most worrying scenario. Someone else would control our business”. “The ‘Provider World’ is about new ways of accessing the consumer. Providers emerge and call the shots”. “Could Virgin be a provider?” “Providers would be ‘invaders’ with freedom to act. The brands would be squeezed by invaders”. The participants then broke up into three small groups to explore possible future actions. All participants were engaging with presenters having a good knowledge of their small group output. No group disengaged. Action possibilities for the three scenarios emerged, without the participants favouring any particular action. Five possible actions were created. The participants began to connect potential actions to create a more wholistic response. They all seemed to converge on one embryonic overarching possibility – ‘Customer Service Centre’. The following exchanges highlight initial discussions around the ‘Customer Service Centre’, as a conceptual idea, and at the same time recognising potential challenges they might face. The exchanges were open ended, with gaps in thinking, and a willingness to keep exploring the possibility. This was the first time that the ‘Customer Service Centre’ had been discussed, with the scenario project having had a five-month life at that time. Exchange 3 – the embryonic ‘Customer Service Centre’ “There is confusion over its (potential) role at present”. “The case for a packaging team, an engineering team, a trouble-shooting team, and product development team is clear”. “However, if the ‘Customer Service Centre’ was brought into CBC, CBC would not have control”. “Bringing in the capabilities under one umbrella makes sense. However, political agendas result in competing objectives. The ‘Group’ would need to send the message”. “It could also be viewed as rationalisation, with job losses, and brand frictions”. “We have a three-year capital expenditure plan covering new customers capture, investment in machinery to improve capacity, but not as part of the ‘Customer Service Centre”. Whilst the ‘Customer Service Centre’ had collective appeal, there was a sense of an unspoken or hidden concern within the participants. The exchange continued:

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Exchange 4 – Recognising internal politics “Develop group strategic capability or is it the Executive to develop the future?” “We take it to the board. It’s going to happen to us, or we make it happen”. “We are helping manage group internal dialectic process”. “Business Process Re-engineering on the table, however, this provides a stronger rationale, a strategic rationale. The Business Process Re-engineering project is built around sales order management”. “We have crystalised our thinking, as we did not have a process for strategy”. “We were missing ideas, and now that the ‘Customer Service Centre’ is defined, and we can move forward. One month later the participants reconvened to finalise their proposal. The final proposal would be a presentation made to the group managing director and board members. The participants reflected on their journey: Exchange 5 – Out of uncertainty into coherence “The process has peeled back layers of the company”. “If you re-read the interview notes, elements were noted, except the upstream angle, which is a new strategic thrust”. “What was missing was the coherence in the overall framework”. “Customers play a game with us. Capacity then becomes under pressure. The plant needs to be more fully utilised”. “We had a fruitful conversation with a sister company. They agreed that we should develop the ‘Customer Service Centre’. Their rationale was simple, rationalise overlapping services, get a better service, flexible to demand changes, and improve profitability”. “We now have a clear framework as opposed to the fragmented pieces. We have a business logic”. “I can see things happening, twelve months ago we couldn’t”. “We have a solid argument, competitive in the marketplace. We can influence decision-making rather than reporting back on the process”. Following on from the presentation made to the group managing director and board members, the participants discussed the unfolding logic of the ‘Customer Service Centre’: Exchange 6 – Redefining the Business “Moving upstream is a new strategic thrust. We have moved our thinking from downstream operations”. “We need to change the relationship with suppliers by pushing out planning horizons, develop links through technology rather than irregular bulk purchases”. “We have an opportunity to develop relationships with key customers, we will become the total supply business”. “We need to build capability to respond to new product development demands, cement the supply base, and control upstream supply chains”.

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“The ‘Customer Service Centre’ involves receiving malted barley, maturation, blending, bottling, and distribution. The key is technology, data, and visibility of order to give us better interface with the customer.” “The world’s moving faster than experienced to date, need to get systems in place, and if we do not pay attention to information we could go under”. “Information technology will change the way we do business; it is an enabler”. “It will be a step leap in our capability, rather than a small change. It will be a point of difference for us”. “If we do not exploit changes in the marketplace, we will have no power”. For the participants, they realised that technological changes surrounded them, and that these changes would potentially enable upstream customers and third-party ‘providers’ to control the business. All things being equal, if CBC did not harness technological changes, then the unpredictability of supplying customers’ orders would continue or worsen over time.

Reframing and the Business Idea The insights, implications, and proposals that emerged from the scenario process had a major impact on how the participants thought about and understood their business. Previously the key assumption was based on “whisky is king”; whisky is the scarcity in the marketplace and the case study organisation owned stocks of whisky and the brand names. Whilst stocks of whisky and ownership of brands would remain important, what emerged for the participants was the need to put technology and information at the centre of the business. Data, data flows, and data analysis from downstream activities (for example, receiving malted barley, maturation, blending, and bottling) to upstream activities (for example, co-ordinating distribution and logistics, understanding customer replenishment and orders) redefined the activities and boundaries of the business. Now they recognised and understood that ‘information was king’. By doing so they were removing perceived business boundaries and moving to a situation that was more fluid recognising the changing world. The reframed business idea was based around the emergence of the ‘Customer Service Centre’. The strategic logic behind the ‘Customer Service Centre’ was to develop a more efficient business that had seamless information flows from downstream activities (for example, malting barley to mashing to distilling) to upstream activities (for example, product distribution to customer stock levels to customer replenishment triggers). Many of the existing skills, assets, and know-how would still apply, with the information flows and data analysis enabling CBC to better co-ordinate production planning and scheduling. Doing so with help gain economies of scale in production, reduce soft inventory levels, and better utilise production assets. These activities would help them provide a more efficient and timely service to customers.

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For the participants, as they developed a visual representation of the basis of organising, the reframed business idea was based around ‘information is king’. The participants reflected on the scenario process, which challenged their deeply held assumptions, as well as helped them develop an overall framework to move forward.

Information system Education communication continuous improvement Flexible team structure

Flexible scheduling & production

Investment Upstream & downstream relationships

Data analysis Customer orientation

Know-how technical skills

Customer Service Centre

Surplus

Profitable business

Reputation Independence Group link Financial credibility Figure 14: CBC reframed business idea.

Case Study 2 – CLCS and the IT Consulting Industry Background The second case study is a complete contrast to the first case study. CLCS is an information technology consulting company based in Scotland. The company was formed in 1977. Turnover at the time of the scenario project was £4,500,000, with profits of £225,000. The company’s ‘Strategies for Growth’ plan projected a tripling of turnover in the forthcoming five years. There were five directors and another nine employees that participated in the scenario project. The company was an IBM partner delivering and servicing AS/400 computers and supplied and serviced JBA business applications, primarily System38 software, for IBM AS/400 computers. The System38 software enabled CLCS to offer enterprise-wide management packages that included modules for accounting, order processing, logistics, manufacturing, and customer service warehousing solutions. These solutions were delivered to CLCS clients across sectors such as food, automotive, drinks, style, and service management companies.

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From various CLCS documents it is possible to discern their philosophy and approach to business: “Being a technical company, technical education and training has always been part of life in CLCS”. [extract from scenario project summary document] “It is true to say that the company is good at the immediate and poor at the strategic. The company embarked on a TQM programme, the spin-offs for the company have all been beneficial, and resulted in the ISO9001 award”. [extract from scenario project summary document] “Planning has tended to be an annual “figures game” for the bank, while the “real people” get on with the serious business of keeping customers happy. Cascaded and purposeful strategic goals (other than financial) have been conspicuous by their absence”. [extract from scenario project summary document] “CLCS has always been, and still is, very much task oriented. Being a service company, with considerable and more or less fixed overheads, the emphasis to is staff has been on increasing revenue at all costs as a means to survival”. [extract from scenario project summary document] “From the outset, there has always been a high degree of interaction with customers. Work is often done on site, at the customer’s premises. The initial business philosophy was “you say – we do – we bill – you pay”, and this work-and-bill ethic has been retained”. [extract from scenario project summary document] Why did CLCS engage with the scenario project? “In a recent meeting with JBA, people voiced their concern about being fearful of the future. That’s a common feeling today because we live with so much uncertainty. We like things cut-and-dried, but life ain’t like that anymore”. [extract from Focus on the Future document] CLCS agreed on direction for the next five years, including: “(i) focus on Scotland, (ii) exploit the AS/400 market, (iii) build on relationships with JBA, (iv) move into Windows NT, and (v) identify other markets non-competitive to JBA”. [extract from Strategies for Growth document] CLCS also stated what they would not do: “(i) we will not sell other AS/400 applications e.g., JD Edwards, (ii) we will not sell non-AS/400 applications, which compete with JBA e.g., “Manman ERP on HP”. [extract from Strategies for Growth document]

CLCS Management Team The management team participating in the scenario project, including the five key directors, were the Managing Director, the Financial Director, the Technology Director, the Sales and Marketing Director, the Customer Services Director, and the Quality and Change Manager, the HR Manager, and seven front-line delivery consultants.

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Workshop Schedule The workshop schedule followed the same process and steps as set out above for case study one.

Interview Process and Related Activities The interview process and related activities also followed the same process and steps as set out above in case study one.

Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea Interview Feedback The interviews were written up fully and presented in a report, which was provided to all participants at the outset for workshop one. There were five major themes: (i) Fundamentals of the Business (14 pages), (ii) Organisation (6 pages), (iii) Corporate Issues (6 pages), (iv) Lines of Business (8 pages), and (v) Demand (2 pages). Of the five major themes, three themes had an internal focus – Fundamentals of the Business, Organisation, and Corporate Issues – and the other two themes were an external focus, predominately around demand for IT consulting services. However, when unpicking the five themes, it became evident to the participants that the thinking and issues were constrained by a short-term focus, and not an expansive worldview. Unpicking the five themes highlighted: (i) Fundamentals of the Business – customer value definition and related selling activities, people and culture, and relationships with partners; (ii) Organisation – structure, individual and collective performance and responsibility, and decision-making processes; (iii) Corporate Issues – finance, corporate development, corporate image and geography; (iv) Lines of Business – JBA demand and development, other programming services, AS/400 technical services and (one-off) special projects; and (v) Demand – technology developments and acceptance, and competition. A summary of the interview data was presented in workshop one and recorded on thirteen flipcharts, which were hung on the walls throughout the workshop for review at any time. The ambition for CLCS was to triple revenue in the next coming five years. Growth would be a combination of the acquisition of new customers and delivery of innovative software to existing and new customers [stated in the Strategies for Growth document]. Here are a few exemplar comments and exchanges between the participants that occurred during the interview feedback workshop:

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Exchange 1 – People are our business “Trust is important for us, we do it well, but need to work on relationships”. “People buy from people”. “Interestingly, the report is light on people”. “We have good people; they take initiative and bring common sense”. “Is there anything unique to CLCS? Professional knowledge which we need to keep providing in the future”. “Growth will be through repeat business”. Exchange 2 – Basis of business growth “New business has only two inputs – IBM/JBA and our reputation. We always respond to ITTs”. “Our reputation is in a specific area. Does reputation work against us?” “We need to develop our experience”. “We would have a hurdle to get over, difficult to convince people about new things”. “Does a bubble hide non-performance in new sales?” “Parts of the business thrive on a bubble; parts of the business are hindered”. Exchange 3 – Basis of Success “We have been about for a while and are here for the long-term. We are no fly-bynight”. “We are the best kept secret; we do not project our image”. “We have a can-do ethos and are fun to work with”. “Who knows this?” “We have never articulated these things, never looked at CLCS like this. It’s all tacit, not agreed”. Exchange 4 – Industry success and differentiation “There are tier 1 and tier 2 players”. “The big six have dedicated implementation teams”. “We don’t know why customers would choose a big six implementation team. That’s not about relationships”. “Our ethos is to support products. I have two questions. Should we be nimble? Can we be nimble?” The participants reflected on the interview feedback, and one participant commented: “Strategies for Growth – is it about making it happen, or is it hope management?” This comment was the general view of the participants – who are we and where are we going? The implication of the earlier comments about strategy as financial projections was clear. Growth would be measured in financial terms. On top of that, there

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was recognition of growth based on selling more to existing customers, and that would not achieve the tripling of turnover.

Scenario Agenda At this juncture the workshop stopped for lunch. The next stage was the development of the business idea, which was followed by a discussion to develop the scenario agenda. The process to develop the scenario agenda was an open-ended idea generation approach to issues and concerns held by the participants. These could be stimulated by the interview feedback and/or could be new issues or concerns. These issues and concerns were recorded on Post-it notes, placed on flipcharts, and subsequently clustered/ grouped into higher-level issues and concerns, to form key uncertainties. These key uncertainties would be the starting point for the scenario-building workshop. Ninety-six issues and concerns were created by the participants. They surprised themselves with both the quantity and quality of the issues and concerns generated, and they proceeded to cluster these issues and concerns. The participants worked together, discussing and connecting ideas together, and building consensus about the emergent clusters. One participant commented: “Surprises for some people, but not for others. It was good to identify the emerging team learning about each other”. The emergent clusters were titled: (i) People (covering changing labour markets with aging workforce, skills shortages in the UK, people demand new types of career, staff movement to gain new skills), (ii) Scotland links (covering independence and new currency, downturn in Scottish economy, extent of political and government support for SMEs, Scottish independence and brain drain), (iii) Future rent sources (covering application of new technology, emerging technology for business applications, commoditisation of hardware, cost more important than trust), (iv) Internet cyberworlds (covering extent of growth in internet, electronic communication free of charge, virtual towns and cities, cyber-terrorism), (v) Infrastructure technology (covering integrated TV/PC/HiFi technology, BT plc taking over all wide area networks), (vi) Technology solutions (covering customers installed systems with their own staff, customer do not need consultants, open systems future, role of expert systems), (vii) AS/400 + NT (covering balance between PCs and mid systems, scalability of NT, impact on AS/400), (viii) Future of ERP solutions (covering JBA competitors, big six and ERP, JBA future), (ix) Bubble (covering EU impact on salaries, open borders impact on recruiting skills), (x) Macroeconomics (covering state of Asian economies, global economics and impact on UK, funding and cost of an aging society), (xi) Customer protection (covering consumer protection legislation, legal changes to information technology guarantees), and (xii) Monopoly (covering relationship between MS and IBM, MS dominance in the marketplace, emergence of new technology players, nature of competition).

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An exchange between two participants highlighted the extent of and concerns about their thinking. Participant 1: “We seem to be concerned about the economy and its impact on demand for our services, and the role of technology to support business in the future”. Participant 2: “We look after the customer, in a good way and see ourselves as a good person. We are doing well and could do better. However, we are losing customers. Are we doing the wrong thing?” The exchange highlighted the concern amongst the participants about the future; there was a concern about their ability to achieve the ‘Strategies for Growth’ ambitions.

Business Idea Once the scenario agenda was agreed on the participants discussed the nature of their business and its related activities. These activities included their skills and knowledge, approach to engaging with customers, reputation, competitive advantage, and the basis of creating value for customers. Their thoughts and ideas were captured on flipcharts to help them develop a visual representation of the business. The visual representation aided and enabled them to discuss, reflect, negotiate, and build a shared understanding and agreement on the current basis of organising. The key aspect of organising was a combination of trust and integrity, know-how, and experience to retain existing customers, achieve repeat business, and harness reputation, people, and professional know-how to gain new business.

Workshop Two – Scenario Building All of the participants from workshop one joined the scenario-building workshop. In addition, two invited ‘remarkable people’ participated in the workshop. One to bring outside knowledge about the role of technology to redefine business logics and processes, and the other to bring outside knowledge on information technology trends. At the outset of the workshop some ground rules in terms of the scenario process were established. Throughout the presentations by the ‘remarkable people’ there were signs of attentive and thoughtful listening by participants. The ‘remarkable people’ referred to the interview report and raised challenging issues and questions for the participants, which were discussed openly. Following on there was significant and in-depth questioning of the ‘remarkable people’ on issues contained in their presentations for clarity, exploration, discussion, and some friendly ‘banter’ including some laughter, between the participants. Throughout the participants were disciplined and courteous and listened intently.

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Investments

New business

Experience size, scope

Training development

Professional know-how

Income

Reputation Repeat business

Specific customer know-how

Integrity

Quality of people

Trust

+

Customer satisfaction

Problem solving solutions

Scottish base IBM/JBA

Founders

Support

Figure 15: CLCS Original Business Idea.

Here are a few exemplar comments and exchanges between the participants that occurred during the ‘Remarkable People’ presentations: Exchange one – Constrained by bounded thinking Participant 1: “Comparing growth between Microsoft and IBM, Microsoft has grown at 30% year-on-year, whereas IBM has only grown by 10% in the last 10 years”. Participant 2: “We also sell NT licences and defend our position with IBM”. Participant 3: “That sounds that we are justifying and defending our position”. Participant 4: “What about JBA (software)?” Exchange two – Understanding the relationship with customers Participant 1: “If a customer has a problem, they call us, and we respond to help the customer and make the customer happy”. Participant 2: “It’s about people not product”. Participant 3: “It’s about consistency of the product. The transaction length needs to be forever. How do we maintain that level?” Participant 4: “We are asked in and take the initiative”. Participant 5: “We take ownership of the problem”. Participant 6: “We are perceived as biased given our links to IBM and Lotus rather than NT”.

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Developing Scenarios The participants moved into idea generation, from their initial interviews plus the ideas introduced by the ‘remarkable people’. The participants generated fifty-eight new ideas, and these were then clustered. The clusters were: (i) Future of the internet, (ii) Globalisation and its consequences, (iii) Future of IT consultancy, (iv) Pace of technological change, (v) Scottish business climate, (vi) Nature of consumer legislation, (vii) Backlash or embracement of technology, (viii) Future of Microsoft, (ix) Future of IBM, (x) Labour market supply and demand, and (xi) Extent of IT industry competition and impact on JBA. The participants then discussed which clusters should form the scenario axis. This proved a challenge for the participants as there was disagreement between them on the significance and importance of the eleven clusters. There were four separate attempts to agree on the two critical uncertainties to form the scenario axis. No matter which two critical uncertainties were chosen it became obvious to the participants that competition in the IT consulting industry had a major impact on JBA, that the future of the internet would help or hinder growth, and that Microsoft would have a significant impact on personal and business applications in the future. To help resolve the situation, the participants decided that they would create two scenarios axis. First axis would be based around two critical uncertainties: (i) Extent of IT industry competition and impact on JBA and (ii) Future of the internet. The two scenario dimensions were: (i) Extent of IT industry competition and impact on JBA – (a) industry logics as is and (b) industry logics and competencies re-configured; and (ii) Future of the internet – (a) takes-off and (b) stalls. Internet takes off and grows

Future of

Dog eats dog

Extent of IT industry competition

Bare Essentials

the internet

Industry logics and competencies reconfigured

Strategies for Growth

and impact on JBA

Industry logics as is

Business as usual

Internet slow to take off Figure 16: Developing scenario titles.

Second axis would be based around (i) Extent of IT industry competition and impact on JBA and (ii) Microsoft’s approach to internet and business and personal computing. The two scenario dimensions were: Extent of IT industry competition and impact on

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JBA – (a) industry logics as is and (b) industry logics and competencies re-configured; and (ii) Microsoft approach – (i) Microsoft across all markets and (ii) Microsoft stays out of business market. Microsoft across all markets

Industry logics and competencies reconfigured

Extent of IT industry competition

JBA fails

Microsoft approach to the internet and computing

Microsoft Rules OK (+ JBA fails)

Tough Choices

and impact on JBA

Industry logics as is

Business as usual

Microsoft stays out of business market Figure 17: Developing scenario titles.

However, one of the scenarios was discounted as it reflected CLCS ‘Strategy for Growth’ plan and there was agreement that time would be better invested in the other scenarios. In addition, JBA failed in two of the scenarios in the second axis, and there was agreement that time would be better invested in understanding the impact of Microsoft to better understand why JBA fails. The participants acknowledged that they could reflect on the ‘Strategies for Growth’ at the conclusion of the process. Such an outcome is unusual; however, it highlights the desire to embrace the changing world and develop new knowledge and understanding by the participants during the scenario process. The three scenarios that the participants agreed to develop further were: (i) Bare Essentials (combining (a) IT consulting industry highly competitive and JBA fails, and (b) Internet stalls) (ii) MS Rules OK (combining (a) IT consulting industry highly competitive and JBA fails, and (b) Internet takes-off) (iii) Tough Choices (combining (a) consulting industry highly competitive due to Microsoft entering the business segment and JBA survives, and (b) Internet takes-off) The participants were then allocated to one of the three scenarios, to develop the scenario story that linked the past to the present to the future state five years ahead.

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“Tough Choices” plug-and-play becomes the norm demand for “solutions” service dries up

benign economic climate the internet takes off MS enters the business market

packages become “mass-bespoke” industry evolves to “enabling” mode “MS Rules OK”

the economy does not perform well the internet becomes a failure MS stays out of the business sector “Bare Essentials” Figure 18: Scenario pathways.

These three scenarios challenged the participants’ deeply held assumptions about their business, the IT industry, their relationship with customers, and technological innovation, especially operating systems and platforms. There were also significant conversations about JBA, the key ERP software supplier to CLCS. As one participant noted: “Microsoft are the dominant force for business, and it is hard to ignore the impact on JBA”.

Scenario Summaries In the Bare Essentials scenario stable economic conditions did not last over the medium term, mainly due to downturn in Asia. The Scottish economy performs worse than the rest of the UK due to continued uncertainty around its position within the UK. Investment becomes stagnant with an increasing number of businesses going out of business. The internet increasingly becomes unregulated, with growth of criminal activity. Cyber-security becomes a new and major concern for individuals and businesses. Microsoft enters the business packages market and increasingly gains power. With this trend other players enter the business packages market, with SAP entering with a low-cost offering. Microsoft was able to exploit first-mover advantage, and they became the standard setter. SAP continued to build market share which has a detrimental impact on smaller software suppliers such as JBA. Both Microsoft and SAP offer to help non-Microsoft or SAP users migrate to their software. One key feature of this dynamic,

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in a difficult economic situation, is the search for new ways to support businesses, especially those described as small- and medium-sized enterprises (SMEs). The recognition of the opportunities from B2B and B2C drives a new relationship and way of consulting between the IT service industry and businesses. It is not about selling packages or even selling solutions as packages are now standardised and the market for installation of new packages declines, with maintenance increasingly delivered in-house. The new business model is about the co-production of value in the customer’s total commercial system, ranging from the customer’s suppliers to the customer’s customer. This new type of business is increasingly understood as ‘enabling’ (as opposed to ‘relieving’). MS controlled SAP the standard Major economic recession

Backlash, government regulation

Major Y2K crashes

Poor investment climate in Scotland

Internet withers

No package sales in 1999

SAP buys JBA IT service industry a profession

IBM supports SAP low end a success New business in enabling service

Downsizing in IT service industry

Figure 19: Bare Essentials overview.

In the MS Rules OK scenario stable economic conditions in Europe and the UK result in an economic boom, and investment climate continues to be healthy. The Scottish economy grows but is locked into a debate about independence or remains as part of the UK. People increasingly embrace the internet with critical mass attained. P2P networking, B2C, and B2B take off with fears over internet security receding. A key feature of this scenario is the outcome of the courtroom battles between Microsoft and various legislative bodies. Microsoft wins and quickly uses its power to dominate the B2B and B2C markets as Microsoft becomes the accepted platform. A new principle emerges from this situation, known as ‘mass-bespoke’, where systems can be created from standard building blocks. These ‘mass-bespoke’ building blocks can be configured flexibly, depending on the need and situation of the customer. Microsoft provides support to push this approach across business sectors. The role of the IT consulting industry changes dramatically in the mass-bespoke world. With standard components now available there is less requirement for pro-

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gramming work installing and maintaining systems. The scope for mix-and-match has increased. With the growth of the internet the opportunities for P2P networking, B2C, and B2B take off with fears over internet security receding. Codified service products have a major impact on the IT consulting industry. The mentality of ‘enabling service’ has provided an opportunity for non-traditional entrants to enter the consulting industry, with their knowledge challenging the dominant position of established industry incumbents. Initially the invasion by the nontraditional entrants was under-estimated, with technical know-how becoming less and less of a differentiator and more in-house support becoming another threat to established industry incumbents. The rules of the IT consulting industry evolve. Separation of IT and business is broken; IT has become plug-and-play. To make the transition new combinations of technical skills and business acumen would be required. Instead of the technical skill expert, consultants now need business and management knowledge to understand the fundamentals of e-business. Hardware becomes a commodity. Customers no longer bring problems to be solved, service is now based around co-production between the consultant and customer, and relationships are increasingly short-term in nature.

Economic stability

Internet takes off

Business expansion in Scotland

MS enters business sector

Skillset offered: business acumen imagineering visioning

Development of “massbespoke”

New marketmaking companies

Computer services industry: less support more enabling

Invasion of media/ advertising companies

Figure 20: MS Rules OK overview.

In the Tough Choices scenario stable economic conditions in Europe and the UK results in an economic boom, investment climate continues to be healthy. Demography benefits growth in hi-tech and the internet. People increasingly embrace the internet with critical mass attained. P2P networking, B2C, and B2B take off with fears over internet security receding. Knowledge workers become ever more flexible in terms of work patterns and employers become used to this as the new ‘norm’. Low-cost communications for e-business, with a flexible workforce, favour fast-moving small companies. For software suppliers, they are able to take advantage of the business packages market, and

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those supplying smaller companies become increasingly successful. Major software players entering the low-end markets struggle. Innovation and product development continues at a fast pace, with a focus on seamless connectivity to the internet making more products plug-and-play. The trend towards plug-and-play in the business package market leads to a gradual change in the relationship between service providers and customers. Less support is needed, customers are able to do more themselves, and the relationship between customers and service suppliers becomes more contractual and less dependent on long-term relationships. Consequently, demand for service providers reduces and is less predictable. A major media player enters the e-commerce market and creates a new global marketplace, facilitating a meeting place for buyers and sellers. Microsoft moves from the exclusive desktop approach and announces that it will be the global standard setter, entering the business packages market in a major move. Initially Microsoft focuses on the high-end, large company segments. JBA continues to be successful, keeping away from Microsoft standards. This eventually backfires on JBA. At the same time IBM software packages have migrated to Microsoft standards. All of these factors combine to make the IT consulting industry more and more competitive, and several small companies fail. Internet takes off, problems resolved

Internet commercial use

MS enters business sector

Professional work force becomes self-employed

Stable economic success

Small companies do well

MS buys SAP

MS buys JBA

SAP low end fails

Industry consolidates

JBA thrives

Figure 21: Tough Choices overview.

Insights and Implications The scenario set as a whole indicated that change in the IT consulting industry (including software packages and applications) was mostly not good for JBA, the key software product installed and maintained by CLCS. Microsoft entering the business market with products having plug-and-play characteristics would reduce the need for

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customer problem-solving support. There were many other possible developments which would create serious problems for CLCS (and JBA), including: – Uncertainty over JBA reliability of systems and software and the impact of application packages reduced due to plug-and-play, – Economic concerns driving down demand facilitating the growth of B2B and B2C, with an increase in the ‘cashless society’, and thus less demand for IT consulting services, – A low-end SAP package becoming a serious competitor (especially to JBA), – Microsoft innovating mechanisms to support the growth of the internet and e-business, and – Microsoft becoming the industry standard, with the growth of plug-and-play impacting skills in the IT consulting industry. As one participant noted: “If we see these starting conditions then it has happened already. We are further down the line than we think”. Another participant commented: “How do we get everyone out of, or away from, the day-to-day issues? It’s not easy. I am finding it hard to leave CLCS approach behind”. An exchange between three participants reveals the significance of deeply held assumptions that constrain the way of engaging with customers: Participant 1: “Everyone in the room spends time with customers, do we have real customer contact to understand the customer’s business?” Participant 2: “We have lost customers”. Participant 3: “Do we know why we have lost customers?” Participant 2: “We try to understand customer needs”. Participant 1: “We do not have enough meetings at Board level between us and our customers. We do not know what their system does for the business, from the perspective of the customer”. Participant 3:“Our rules of the game constrain thinking. Maybe we need to offend customers”.

Workshop Three – Strategic Implications Following an incubation period, the participants re-grouped to review their business idea and the scenario set and discuss a way forward. The initial phase of the workshop was a recapitulation of the outputs from workshop one and workshop two. Here are a few exemplar comments and exchanges between the participants at the outset of the workshop reflecting on workshop one and workshop two:

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Exchange 1 – Reflection on the scenarios Participant 1: “These scenarios are intriguing. Whichever way you take it in, why should we be working with JBA?” Participant 2: “From nothing to this quality of output is incredible. We are moving forward”. Participant 3: “I was speaking with a Microsoft manager; he is an ex-IBM colleague. He stated that JBA was ‘old technology’, and that Microsoft are recruiting like crazy. They have eighty consultants now and are looking to have five hundred consultants within the next two years”. Participant 1: “We cannot stop, we have to change, or everything will dry up for CLCS. We can continue with our existing expertise but invest to develop new skills. We need to invest in understanding Microsoft”. Exchange 2 – Reflection on the interviews Participant 1: “Looking back, there is diverse range of views in the interviews. Was that a signal?” The participants then broke up into three small groups to identify, discuss, and explore possible future actions. All participants engaged with their small group task. No group disengaged as they sensed the importance of the situation. Action possibilities for the set of scenarios emerged, without the participants favouring any particular action. Exchange 3 – Understanding and exploiting innovation Participant 1: “Innovation surrounds us. How do we exploit it in the future?” Participant 2: “Are we too late?” Participant 3: “What kind of company do our customers need?” Participant 1: “I don’t think we can compete immediately”. Participant 4: “Change is all over the boards – CLCS need to learn how to change”. In developing possible actions to harness the insights from the scenarios, the participants spent time generating and developing ideas as possible future actions. They generated eighty-nine ideas. From these eighty-nine ideas, twelve higher-level outcomes/ possibilities were developed by the participants, which were split equally between ‘portfolio strategies’ and ‘capability strategies’. The capability strategies included: (i) Understand enabling, (ii) Look ahead and develop business environment scanning, (iii) Develop financing policy, (iv) Develop group structure, (v) Develop marketing, and (vi) Take staff with us. The portfolio strategies included: (i) Develop enabling partnerships, (ii) Change to a Microsoft strategy, (iii) Become an SAP partner, (iv) Develop internet opportunities, (v) Develop Facilities Management (FM) and Bureauing, and (vi) Become enabling business consultants. Focusing on the possible actions, the participants developed an over-arching map to connect the possible actions, helping them understand and inte-

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Develop enabling approach Exploring existing partners

Develop a MS strategy

Become a SAP partner

Explore internet opportunities Scan for the future

Business consulting approach

Group Strategy

Marketing

Finance

Short-term actions

Figure 22: CLCS over-arching change map.

grate the relationships as well as overcoming potential fragmentation by focusing on each possible action in isolation. The over-arching map that the participants created was based around their insights and the embryonic approach of creating an ‘enabling’ approach to consulting. This was a fundamental shift in participants thinking, from the dominant approach of providing a ‘total solution’ with the client defining the problem CLCS relieving or solving such customer problems to providing an ‘enabling solution’ where both parties work together to define problems and solve problems, which would be designed to help the customer’s grow their business. CLCS would collaborate with their customers to understand customer’s potential competitive advantage. CLCS would collaborate with the customer to configure activities in the customer’s systems to be more effective. The participants then explored the supporting capability strategies to develop them in more detail. The participants added an additional capability strategy which they titled ‘Tackle internal blockages’. For each of the portfolio strategies the participants discussed them one by one and agreed on (i) Business goals, (ii) Activities to achieve the strategy, (iii) Individuals with responsibility to lead and deliver the strategy, and (iv) Target date to deliver the project. A flexible approach was also agreed to enable them to be sensitive to new insights, new events, and new experiences as they moved forward.

Reframing and the Business Idea The insights, implications, and proposals that emerged from the scenario project had a major impact on how the participants thought about and understood their business. Previously the key assumption was based on “providing the total solution” and relieving customers of their problems. This was the premise of their ‘Strategies for Growth’

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ambitions. Yet, CLCS acknowledged that they were losing customers. Now they recognised and understood that ‘enabling the customer to grow’ was a more sophisticated approach to consulting. For the participants, they realised that their assumptions and values were acting as a constraint on their thinking. The constraint on their thinking was acting as a boundary or a blockage on what they would consider as part of delivering IT consulting services. CLCS favoured the AS/400 system and rejected delivering UNIX systems. In addition, technological changes surrounded the business, and these changes would potentially undermine their key software supplier – JBA. The blurring of the adoption of operating systems was creating opportunities that CLCS had missed due to their preference for JBA operating on AS/400 machines. The reframed business idea was based around the emergence of the ‘Enabling Business Consulting’ approach. The strategic logic behind ‘Enabling Business Consulting’ was to move beyond a reactive problem-solving mode of consulting to one facilitating the customer’s business and growth. This would require a deeper understanding of the customer’s business, including an understanding of the customer’s customer needs and values. By doing so CLCS would help their customers capture the benefits of the growth of B2C and B2B phenomena. These activities would help them provide a more proactive, effective, efficient, and timely service to customers. As one participant noted at the end of the workshop: “I now see the value of the process; the structure of the workshop has kept us focused. I cannot believe the depth of understanding generated, and the quality of the conversation has been lifted-up”. Income Investments

Training & development

Experience

New business

Repeat business

Reputation

Business know-how

Specific customer know-how

Technical know-how

Customer satisfaction Problem solving solutions

Trust Quality of people

Integrity

Founders

Figure 23: CLCS reframed business idea.

Enabling business consulting

Customer growth

Case Study 3 – CP and IPC Magazines: the Publishing Industry

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Case Study 3 – CP and IPC Magazines: the Publishing Industry Background As part of a strategic review of the business CP established seven ‘Flagship’ programmes to help manage into the future. At the time, CP regularly experienced peaks and troughs in the business cycle. These peaks had a knock-on impact on relationships with customers and CP understood the reactions of customers during the cycles. CP was a paper manufacturing business supplying high-quality paper to customers in the publishing industry. Both CP and IPC believed that the other was behind the changes in the business cycle. The seven ‘Flagship’ programmes were: (i) Partnership Customers, (ii) Sales and Marketing Effectiveness, (iii) Customer Service ‘One Team’, (iv) Leading Service, (v) Realise People Potential, (vi) Innovation in Action, and (vii) Building a Shared Vision. The research on this case study was developed from ‘Flagship 1 – Partnership Customers’. The strategic objective of flagship 1 was to establish special long-term relationships with major publication customers in priority markets. This required a focus on a change in the traditional business mindset and influence of key customers to develop broader relationships for mutual benefit. The aim was to establish a working together to achieve, for example, better logistics, better communication, and just-intime delivery, resulting in total reduced cost and more profitable business for both parties. [source: internal document Strategy Update 1 (4)] The research here arose from the pilot project with IPC magazines, a major UK customer at the time. The intention was to change thinking about the partnership, moving from an asset-based strategy to a market-based strategy.

CP/IPC Joint Management Team The CP management team were the CP (plant) managing director, the (CP) plant marketing manager, the (CP) operations manager, the CP (plant) business development manager, the (UK Group) business development manager, and the (Parent company) marketing director. They were augmented by the IPC marketing director, the IPC operations director, and an IPC magazine editor. Each participant was interviewed on a one-to-one basis, and everyone participated in all the scenario process workshops. There was consensus between the individuals, and in the participating organisation, that the industry structure was based around an organising logic of pulp/paper/ publishing.

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Workshop Schedule The workshop schedule followed the same process and steps as set out above for case study one.

Interview Process and Related Activities The interview process and related activities also followed the same process and steps as set out above in case study one.

Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea The interviews were written up fully and presented in a report, which was provided to all participants at the outset for workshop one. There were two major themes: (i) general outlook and (ii) the Alliance production. The report was twenty-nine pages in total. The split across the two major themes was: (i) general outlook – 11 pages, (ii) the Alliance – 18 pages. A summary of the interview data was presented and recorded on thirty-two flipcharts, which were hung on the walls throughout the workshop. The ambition for the Alliance project was to smooth out the peaks and troughs in the demand/ supply relationship in the paper/publishing cycle within (the next) three to five years. The general outlook covered outlook for publishing, structure of publishing, publishing economics, role of advertising, IPC economics, IPCs paper supply, IPC strategy, attitudes in printing, attitudes in the paper industry, structure in the paper industry, paper economics, CP economics, CP strategy, and service. The Alliance covered Purpose of the Alliance, price levelling, dynamics of the Alliance, cost of the Alliance, IPC’s advantage, IPC’s constraints, wider IPC group aspects, CP’s advantages, CP’s constraints, wider group CP aspects, priority differences, barriers, knowledge exchange, trust, internal structure of the Alliance, how the Alliance should work, people involvement, future opportunities, and future threats. Here are a few exemplar comments and exchanges between the participants that occurred during the interview feedback workshop: Exchange 1 – Distribution information gap “Who’s buying what, and why?” “Tesco and Clubcard know through their EPOS system.” “Publishing is separated from this information”. “Which way for data in the future?”

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Exchange 2 – Paper economics and basis of investment “The paper supply market is commodity based, rather than cost”. “What will be the impact of technology on price?” “Economies of scale confusing. Paper is a mature industry, technical controls in place. More investment for bigger and faster machines, with basic technology, yet the industry cannot get price stability”. “Risk of over-simplification; not just technology. Paper is a different market situation”. “Our investment strategy is consistent, build plant when (we are) profitable or someone else will invest and build. Is it a valid argument, or is it the ‘herd’ argument?” “It is the same for the weekly publication market. A new weekly magazine costs £2m, how do we maintain our position?” “What is the lead time for a new weekly?” “Most new launches require a lead time of nine months minimum”. Exchange 3 – CP strategy and impact on IPC/customers “CP strategy of preferred supplier of main customer is becoming evident in corporate activities. We cannot move the whole market in one go. Alliances help to deliver individual solution for individual customers. What needs to be put in place?” “Low price is not always the key factor; price would be different across alliances”. “Is it a framework for IPC, and different for others? Or is it lowest price to all? How do we structure one-to-one deals?” “This raises issues of economics of paper. Paper is a critical cost; last point is most important”. “What contributes to cost? What’s in the package? We cannot give everyone the lowest cost.” “CP spent time on these areas and believe that we can get there. Then people automatically expect everything all the time; it is an on-going battle to keep these in place”. “The partnership is important, constant greater awareness of other people’s actions now more transparent. Bigger benefits, building the alliance is not just in the mill”. “Eighty per cent of customers place no emphasis on paper; they expect it on the print machine”. “IPC is different, we take a different view of publishing”. Exchange 4 – Mitigate the cyclical nature of paper price “Last year CP made an investment (in the Alliance), now it’s IPC’s turn”. “Is that a question or a statement?” “IPC commitment of tonnage to CP”. “If we look at a point in time, it is true”. “The spot market is the most difficult. How do companies value this? What’s important to both companies? What commitment can be made by IPC? We can improve the economics of the mill and guarantee certain chunks of production. We need something in return. Do either side believe they are getting full benefit?” “We need to put numbers to the benefits now”.

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“You don’t need to worry about selling twenty per cent of output with our consistent take-off”. “Commitment to the Alliance is not tested yet. We are making investment in capacity and when there are upturns in pricing in certain markets, these pressures will then test us”. “We are confident that this will not be a problem. Look at personal relationships, irrespective of market movements. There is trust in the Alliance to date”. “There is a big threat – support and involvement of a wider range of people”. “The future will depend on the foundations that are built today. Sell inside our own organisations, then move on selling proof that it is working”.

Scenario Agenda At this juncture the workshop stopped for lunch. The next stage was the development of the business idea, which was followed by a discussion to develop the scenario agenda. The process to develop the scenario agenda was an open-ended idea generation approach about issues and concerns held by the participants. These could be stimulated by the interview feedback and/or could be new issues or concerns. These issues and concerns were recorded on Post-it notes, placed on flipcharts, and subsequently clustered/grouped into higher-level issues and concerns, to form key uncertainties. These key uncertainties would be the starting point for the scenario-building workshop. Thirty-five issues and concerns were created by the participants. They surprised themselves on both the limited quantity and range of quality of the issues and concerns generated, and they proceeded to cluster these issues and concerns. The participants worked together, discussing and connecting ideas together, and building consensus about the emergent clusters. One participant commented: “We seem to be focused on the industry dynamics”. The emergent clusters were titled: (i) Consumer behaviour, (ii) Communication and communicating, (iii) Cost drivers, (iv) Technology, (v) Industry structure, (vi) Process points, (vii) Macro-economics, and (viii) Green impact. An exchange between two participants highlighted the extent of and concerns about their thinking. Participant 1: “We do not have precise objectives to measure the arrangement. No key tasks agreed for the partnership. Participant 2: “All we can hope for is to achieve improved efficiencies for both companies.” Participant 2: “People need trust and openness.” Participant 1: “It’s the missing link at present”.

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The exchange highlighted the concern amongst the participants about the future; there was a concern about their ability to make the Alliance work due to the differences between costs (a publishing concern) and prices (a paper manufacturer concern).

Business Idea Once the scenario agenda was agreed the participants discussed the nature of the Alliance partnership and its related activities. These activities included the combination of both organisations’ physical assets, leadership and collaboration, sharing market knowledge, transparency, synergy, and stability for pricing commitment as the competitive advantage, and improved market position as the basis of creating mutual value. Their thoughts and ideas were captured on flipcharts to help them develop a visual representation of the Alliance. The visual representation aided and enabled them to discuss, reflect, and build agreement to move forward with the process. Education IPCs unique manufacturing system

Leadership

CPs local mill

Facilitation

Market position Profit Success

Synergy

Collaborative culture Transparent benefit sharing Market knowledge

Trust

Investment £/time/attention

Slack Predictability

Pricing commitment

(Increased) Stability

Figure 24: Alliance original business idea.

Workshop Two – Scenario Building All of the participants from workshop one joined the scenario-building workshop. In addition, three invited ‘remarkable people’ participated in the workshop. One to bring outside knowledge about the role of technology to redefine business logics and processes, one to bring outside knowledge about collaboration between organisations, and the other to bring outside knowledge on systems dynamics in industry sectors. At the outset of the workshop some ground rules in terms of the scenario process were established.

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Throughout the presentations by the ‘remarkable people’ there were signs of attentive and thoughtful listening by participants. The ‘remarkable people’ referred to the interview report and raised challenging issues and questions for the participants, which were discussed openly. Following on there was significant and in-depth questioning of the ‘remarkable people’ on issues contained in their presentations for clarity, exploration, discussion, and some friendly ‘banter’ including some laughter, between the participants. Throughout the participants were disciplined, courteous, and listened intently. Here are a few exemplar comments and exchanges between the participants that occurred during the ‘Remarkable People’ presentations: Exchange 1 “Why does paper price fluctuate? It dominates economics of publishing”. “Paper consumption is linked to demand, yet visibility of paper stocks is not clear”. “There is a link between the magazine cover price, circulation and advertising revenue, yet there is a time lag after a policy decision is taken”. “The driver of demand is price, then stocks, not consumption. Consumer demand is predominately on-the-spot purchase. Subscription is small in the UK”. This is one example of the participants realising that the pulp/paper/publishing system relationship was inherently unpredictable. Prior to this point, both parties to the Alliance blamed the other for fluctuation in the price of paper. Exchange 2 “The Alliance needs to be clear on common goals?” “What is threatening circulation? What is threatening advertising?” “What creates value for the consumer from magazines?” “Who had data on consumers?” Here is an example of the participants revealing to each other how little they understand about demand patterns (for magazines). As mentioned earlier, both parties blamed each other for price fluctuation; then if neither can manipulate price, then who can? Exchange 3 “Is the Alliance wide enough?” “Who is screwing paper and publishing?” “What is creating erosion of advertising revenues?” Following on, a few moments later, from the previous excerpt the participants began to realise that they were both under threat.

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Scenario Building The participants moved into idea generation, from their initial interviews plus the ideas introduced by the ‘remarkable people’. The participants generated sixty-six new ideas, and these were then clustered, creating thirteen clusters. The clusters were: (i) intentions of IPC owners, (ii) consumer attitude to new technology, (iii) disposal income/economic performance, (iv) environmental legislation, (v) stability of pulp/ paper market, (vi) world of netizens, (vii) decoupling pulp price, (viii) sources of advertising revenues, (ix) publishing margins stability, (x) relationship and function of content channels, (xi) new media and control of advertising, (xii) role of publisher in the future, and (xiii) control of (consumer) databases. The participants then discussed and agreed on the scenario axis. The axis was based around two critical uncertainties: (i) the industry behaviour and dynamics (to understand the nature and pace of change) and (ii) the external forces and impulses driving change. The rationale behind these choices was a combination of outside-in forces including societal attitudes to new technology, technology and media firms driving change, and inside-out forces for collaboration for change. This resulted in the scenario logics given as follows. Outside-in forces Promoting traditional media

The Godfathers

Inside-out forces Pulp and paper unstable

Inside-out forces Pulp and paper consolidation

Party of the Invaders

New Constellations

Outside-in forces Replacing traditional media Industry logics and competencies re-configured Figure 25: Developing scenario titles.

The two scenario dimensions were: industry behaviour and dynamics – (i) pulp and paper consolidation and (ii) pulp and paper (even more) unstable; external forces and impulses – (i) slow development and (ii) industry logics and competencies re-configured. Resulting in four scenarios.

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(i) ‘Business-as-Usual’ (combining slow external impulses for change and pulp and paper instability) (ii) ‘The Godfathers’ (combining pulp and paper stability and consolidation with slow development) (iii) ‘New Constellations’ (combining pulp and paper stability and consolidation with industry logics and competencies reconfigured) (iv) ‘Party of the Invaders’ (combining pulp and paper instability with industry logics and competencies reconfigured) The participants were then allocated to one of the three scenarios; business-as-usual was discounted as the participants were familiar with such conditions, to develop the scenario story that linked the past to the present to the future state five years ahead. The Godfathers scenario was a combination of outside-in forces and inside-out forces. The outside-in forces led to an increase in demand for printed media, helping the inside-out forces increase stability in the pulp/paper/publishing industry. Here, the pulp/paper/publishing industry are the locus of change; they are the architects or drivers of change. The scenario is based on the industry working together to overcome short-term and long-term price stability in the price of paper. After the initial concerns from industry representatives about the challenges from new and alternative media channels, they act as a stimulus to consumers who purchase more printed publications, rather than moving away from reading. The price stability arose from the increasing co-operation between the paperproducing players. This resulted in further consolidation, with fewer but larger players who were able to gain an element of oligopolistic power. Over time, and with longer-term price stability, the industry beings to question the need for collaborative arrangements. Pulp is de-coupled from the price of paper, and competition in the future ensures that price stability continues. A key feature that contributes to paper price stability is that consolidation has enabled the industry to better manage capacity, smoothing out peaks and troughs. In the New Constellations scenario outside-in forces shift demand away from printed media, with the pulp/paper/publishing industry working to reconfigure relationships and ways of working. Here, pulp/paper/publishing industry are co-producers of change. Publishing companies recognise the forces for change that ultimately lead to a restructuring of the industry. New and alternative media sources redefine leisure activities which results in new demands for advertising revenues. Technological developments continue to change the industry rules of the game globally. At the same time societal changes had occurred with the growth of ‘netizens’ who communicate across borders. These outside-in forces enable power to shift to organisations with superior customer information and databases, allowing specific targeting and customisation of products and services. Power ultimately resides with the emergence of ‘global integrated communicators’, consisting of providers who have customer knowledge and

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Pulp price volatility Pulp futures market Paper price volatility Consolidation of paper industry

Stale economy

Global oligopoly Paper price stability

Paper/publishing alliance

Conventional distribution channels

Slow but consistent growth

Growth of alternative media

Success in keeping out foreign publishers

Figure 26: The Godfathers overview.

know-how to exploit the new channels of communication. They are made up of constellations of publishers, advertising companies, telecommunication companies, financial service companies, and consumer brand companies. The publishing houses, who are the first to feel the impact of this new world, realise that to survive they need to communicate with global ‘netizens’ on a one-to-one basis. The publishing houses innovate and exploit opportunities with ‘global integrated communicators’, based on their existing relationships and knowledge of how to integrate with advertising agencies and other partners. Technological change in paper making

Survival of the fittest in paper industry

New ways of distribution

Paper is a manufactured product

Reduction of waste New communication alliances

House magazines

Alternative media

Electronic communication Global netizens Global integration

Figure 27: New Constellations overview.

Demand for printed word falls Customer value knowledge Reduction of traditional channels

Publishing-led GICs

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In the Party of the Invaders scenario outside-in forces shift demand away from printed media; however, the pulp/paper/publishing industry is unable to respond and reconfigure relationships, leaving the industry wide open for invaders to take advantage and create new markets. The pulp / paper / publishing industry are bystanders, and the invaders are the drivers of change. The pulp/paper/publishing industry is unable to bring about stability in the price of paper. Paper price instability impacts the publishing industry which continues to experience wide fluctuations in its trading margins. In addition, the growing realisation of pulp fibre shortages not only impacts the instability of the price of paper, but it also forces the price of paper upwards. Meanwhile, consumers begin to adopt new technology in greater numbers. Epapers and e-magazines are readily available with a wide range of access points for consumers. Advertising database owners increasingly gather information about consumption patterns and are increasingly able to target adverts. New technology continues to drive change within the ‘communications’ industry (in its widest sense) which more and more redefines the boundaries of industries. Boundaries increasingly blur over time. Existing industry incumbents struggle with the high-cost base; they are increasingly unable to define their role in the media and communications-led future. One major feature which emerges with the fragmentation is the emergence of ‘Content providers’, ‘Service providers’, and ‘Infrastructure providers’ which replaces the previously traditional and established pulp/paper/publishing industry structure. The ‘Invaders’ exploit instability in the pulp / paper / publishing industry, and the high-cost base makes it increasingly difficult for publishers to launch new titles, support existing titles, or develop links and relationships with new emerging media channels. Magazine titles are increasingly bought by the ‘Invaders’ who are able to dominate the New technology adopted by consumers

New markets/emerging economies miss out paper

Demand falls away

Economies struggle to emerge from recession

Paper industry running into overcapacity problems

Room for invaders Demand stagnation & margin pressures

Inward focus

VAT introduced on magazines

Penetration by overseas publishers Environmental pressures

Emergence of: service providers content providers infrastructure providers

Cost increases

Pulp fibre shortages

Figure 28: Party of the Invaders overview.

Industry instability

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reframed industry structure – ‘Content providers’, ‘Service providers’, and ‘Infrastructure providers’.

Insights and Implications The combination of environmental pressure, pulp fibre shortages, and paper price increases with demand stagnation and erosion of publishing margins results in tension in the Alliance. If both parties revert to an inwards focus and mistrust the other, collaboration to bring about stability enables opportunities for ‘invaders’ to restructure the industry. Societal and consumer preferences around new technology further add to industry pressures. Whilst consumers continue to read newspapers and magazines their preference moves away from traditional paper-based products. Over time a wide range of ‘invaders’, across retailers with databases, telecommunication companies, advertisers, and new media companies are able to harness new media channels to satisfy consumer preferences. As a consequence, the paper manufacturing companies experience severe overcapacity problems, which further increases the cost of papers. The industry dynamics and relationships are restructured around a logic of ‘Content providers’, ‘Service providers’, and ‘Infrastructure providers’. The traditional pulp/paper/publishing companies find it increasingly problematic to change their business ideas. The realisation of the predicament that the paper manufacturer faced is encapsulated in the following exchanges: Exchange 1 – identifying knowledge gaps and vulnerabilities “We need to understand databases”. “We need to prepare for the next phase”. “We need to develop our understanding and knowledge of customers. We have no contact with the final consumer whatsoever”. “It is also problematic that our approach to reducing costs would be to invest in bigger and faster production capabilities. That increases our costs when we need to reduce costs, and simultaneously reduces our flexibility”. “We previously discounted media as a threat. We need to do something now, not in ten years!” Exchange 2 – reflecting on the scenario-building workshop insights “There is blackness if we do not do anything”. “We are now looking at the same world, looking with the same eyes, but now looking with different glasses”. “I read the newspapers at the weekend in a different way, I am seeing ghosts where we were not previously seeing them”.

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Exchange 3 – the role of paper in the future “The optimistic outcome would be that the paper industry offers alternative paper products. However, the paper industry is a bystander.” “We need to make the distinction between paper and paper producers”. “If the paper industry provides commodity products, what should a paper company invest in?” “Should we be looking to become the lowest cost producer. This seems to be important across the three scenarios.”

Case Study 4 – PRBV and the Role of Technology in Rail Transportation Background PRBV owns and manages the rail infrastructure in the Netherlands. The company is government owned but operates as a limited company organisation. It is overseen by a supervisory board, headed up by the Minister for Public Transport. The company is managed by a Board of Directors with responsibilities in areas such as finance and human resource management. Below the Board of Directors there are managers with areas of responsibility such as asset management, traffic control, internal and external communications, procurement, strategy and design, project realisation, and rail technical systems. Actual physical work in the field is contracted by PRBV to external contractors. Headquartered in Utrecht, PRBV administers the rail network of the Netherlands with responsibilities including managing stations and the existing rail network, laying new track, building new stations, and controlling all rail traffic and relationships with train operators. At the time of the research, PRBV employed 4129 staff, interfacing with 9 train operating companies carrying approximately 1,083,000 passengers per day and 19 freight carriers hauling 115,000 tonnes of freight per day. Between these two types of organisations, PRBV was responsible for running 3,300,000 trains per year. PRBV’s mission was: ProRail connects people, cities and businesses by a dense, intensively used rail network. ProRail provides a secure, reliable, punctual and sustainable rail network and comfortable stations, in conjunction with operators and partners. Our professionals work efficiently and cost-consciously on a rail network focused on pleasant passenger travel and unobstructed freight transport. Source: internal PRBV document

PRBV developed and initiated a change program: “In Samenspel naar een vernieuwd Nederlands Spoor” (translation: “Together to a renewed Dutch Rail”). This change program identified four strategic ambitions and seven change processes. The four strategic ambitions were the following.

Case Study 4 – PRBV and the Role of Technology in Rail Transportation

1. 2. 3. 4.

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Safer railway: zero avoidable accidents. Reliable railway: zero avoidable disruptions. Punctual railway: further increase in punctuality (together with the railway operators). Sustainable railway: thirty per cent (30%) less energy consumption, the highest level on the CO2 performance table, and adoption of more innovative rail technology.

To achieve these four strategic ambitions, PRBV established seven change processes to be delivered over a three-year period. The seven change processes were the following. 1. Increasing safety 2. Lean: customisable and improving continuously 3. Robust and punctual rail network 4. Developing more train capacity 5. More innovation and sustainability 6. Results driven and cost conscious 7. Adequate scenarios for the future Source: Internal PRBV document: ProRail Strategic Change Agenda Change process 7 was described as “an opportunity to learn and explore when thinking of the future. It was about bringing the outside in and organizing a strategic conversation, understanding future scenarios shared and lived through with our surroundings” (source: internal PRBV document). It was in enacting change process 7 – an initiative to create “Adequate scenarios for the future” – that PRBV commissioned the research project, providing full research access to PRBV senior management as well as developing an internal team of consultants as knowledge transfer. The focus of the project was: ‘The future of asset management, operations and information and communication technology’. PRBV wished to create the time and space to consider how rail networks would evolve given technological innovations and societal preferences.

PRBV Management Team The PRBV management team responsible for, as well as participating in, all aspects of the project included: the Chief Executive Officer, four Executive Directors, five Functional Directors, four Operational Directors, eight other senior managers, and a representative from the Workers Council. Each participant was interviewed on a one-toone basis, and everyone participated in all the scenario process workshops.

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Workshop Schedule The workshop schedule followed the same process and steps as set out above for case study one. There were no ‘Remarkable People’ invited to the scenario-building workshop, as PRBV had a wide range of diverse views drawn internally for the project.

Interview Process and Related Activities The interview process and related activities also followed the same process and steps as set out above in case study one.

Workshop One – Interview Feedback, Agreement on the Scenario Agenda, and Development of the Business Idea The interviews were written up fully and presented in a report, which was provided to all participants at the outset for workshop one. There were eight major themes: (i) Geo-politics, (ii) Economy and sustainability, (iii) Demography, (iv) Social-cultural factors, (v) Mobility in the Netherlands, (vi) The offering and products, (vii) Operations, maintenance, and safety, and (viii) Vision within PRBV. The report was seventy-two pages in total. The split across the eight major themes was: (i) Geo-politics – 1 page, (ii) Economy and sustainability – 3.5 pages, (iii) Demography – 1 page, (iv) Social-cultural factors – 2.5 pages, (v) Mobility in the Netherlands – 5 pages, (vi) The offering and products – 15 pages, (vii) Operations, maintenance, and safety – 7.5 pages, and (viii) Vision within PRBV – 35.5 pages. A summary of the interview data was presented and recorded on flipcharts, which were hung on the walls throughout the workshop. At the conclusion of the interview feedback session there were some insightful exchanges: “We retrieved lots of information, more than expected”. “I liked it as it provided a chance to listen to people. The length of the interview really frees up time and gives people the chance to speak out”. “It’s interesting to see the range of views, some I agree with, some I do not agree with”. “People liked the relaxed setting. No right or wrong answer. No report to prepare. It was not uncomfortable”.

Scenario Agenda At this juncture the workshop stopped for lunch. The next stage was the development of the business idea, which was followed by a discussion to develop the scenario

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agenda. The process to develop the scenario agenda was an open-ended idea generation approach about issues and concerns held by the participants. These could be stimulated by the interview feedback and/or could be new issues or concerns. These issues and concerns were recorded on Post-it notes, placed on flipcharts, and subsequently clustered/grouped into higher-level issues and concerns, to form key uncertainties. These key uncertainties would be the starting point for the scenario-building workshop. Forty-seven issues and concerns were created by the participants, resulting in eleven clusters. They surprised themselves with both the limited quantity and range of quality of the issues and concerns generated. The participants worked together, discussing and connecting ideas together, and building consensus about the eleven emergent clusters. The clusters were: (i) capacity of the network, (ii) complexity of the system, (iii) rate of technological development and impact on demand for travel, (iv) capacity to handle data analytics, (v) mobility of people and reason for travel, (vi) people application of information communication technology on trains, (vii) nature and influence of formal political relationships, (viii) range and sources of information communication technology innovation, (ix) speed of adoption of information communication technology in society, (x) nature of standards – open or supplier driven, and (xi) government approach to financing investment.

Business Idea Once the scenario agenda was agreed on the participants discussed the nature of their organisation and its related activities. These activities included their embedded organisational competencies including infrastructure and track management, relationship management with Government, train operating companies, and suppliers, people and their knowledge and know-how, safety, and reliability. Their thoughts and ideas were captured on flipcharts to help them develop a visual representation of the organisation. The visual representation aided and enabled them to discuss, reflect, negotiate, and build a shared understanding and agreement on the current basis of organising. The key aspect of organising as a public goods organisation was to continuously deliver a quality and reliable service. If there were any issues that impacted delivery of a quality and reliable service, the participants argued that they possessed the know-how and technical skills to solve any problem quickly. Such an approach reassured Government and the wider public.

Workshop Two – Scenario Building The participants reassembled and initially reflected on the eleven clusters agreed on as the scenario agenda. They then discussed and individually generated their thoughts,

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Public value/goods: contribution Dutch social and business community

Relationship with Dutch government

PRBV people

Knowledge and know-how

Neutral & objective

Infrastructure management

Funding

ICT & other systems Track management & scheduling

Capacity allocation Relationship with TOCs

Relationship with contractors

Maximise use of capacity

Safety Reliability Invest wisely

Build agreement & consensus Figure 29: PRBV business idea.

concerns, and ideas around the scenario agenda. These were clustered, then discussed to agree on the issues to form the scenario axis. There was considerable debate between the participants around the role of information and communication technology, with the merging of several clusters to develop a comprehensive inclusion of this concern. There was also considerable debate around the complexity of the system and the capacity to cope with change. It was agreed that the scenario axis was based around two critical uncertainties: (i) the nature of and ability to handle system complexity and (ii) the nature of forces driving information communication technology innovation. The rationale behind these choices was a combination of outside-in forces including technological innovation and societal attitudes to new technology, and inside-out forces to manage and harness change. Given the nature of PRBV the senior management team and participants were keen to understand the potential future challenges that they might face as they moved forward. This resulted in the scenario logics given as follows. The resulting four scenarios were: (i) ‘World of two speeds’ (combining ICT industry develops and leads and implementation guided by a detailed upfront project blueprint) (ii) ‘Sense and simplicity’ (combining user-driven approach as technology innovates and evolves with the need for an emergent approach to implementation) (iii) ‘New horizons’ (combining ICT industry develops and leads and an emergent approach to implementation) (iv) ‘Familiar and predictable’ (combining a user-driven approach and detailed, but reactive, project blueprint)

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Accept complexity Manage complexity Round -about “Sense and simplicity”

Dealing with complexity of the system

“New horizons”

Incorporate possibilities Product/train relevant ICT dominates Apps driving change

“World of two speeds”

ICT business models and products

Old timetables ICT following ICT supporting

“Trusted and predictable”

Complexity continues to surprise Fight complexity Traffic light approach

Figure 30: Developing scenario titles.

The participants were then allocated to one of the four scenarios, to develop the scenario story that linked the past to the present to the future state five years ahead. In The World of two speeds scenario there is a recognition that information and communication technology are long term and of large scale in nature. New projects are carefully analysed and carefully detailed in blueprints. Only after everything has been taken into consideration and crystallised the project execution plan is developed. In this scenario the understanding is to gain control and cover the risks up front. To do so required a self-strengthening spiral of ever-growing projects with increased complexity, making it difficult to deal with unexpected future developments. Such unexpected future developments occurred with the emergence of big data which flourishes in an unpredictable manner, and the scenario ended with higher costs and longer throughput of projects. Such a situation resulted in government and public criticism of PRBV. The Sense and simplicity scenario is based on the trend about fashioning information and communication technology projects into smaller elements, creating steps as small as possible during implementation to enable possible future developments to be anticipated. Over time incorporation of future developments when the right time presents itself and aligns with existing projects. As time progressed the user gained a more determining role in information and communication technology projects as they were closer to the emerging situation and identified opportunities in the propen-

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sity of the moment. Over time there was a shift from a centrally directed ICT function to users that determine what is needed themselves. This change was not only initiated by the wish of the users, but also the wider ICT industry noticed changes and innovated themselves. Over time the users were more and more taking the lead as they understood the system capabilities. Smaller information and communication technology specialists identified information and developed ‘apps’ to harness databases. This promoted the rapid development of “Big Data” technology as these smaller specialists were better able to try innovations quickly on a small scale. Consumers were quick to accept these innovations. Organisations that did not respond were left behind. In the New horizons scenario many organisations experienced project schedule delays and missed connection with societal developments and project financial scope. For some organisations projects were delivered; however, they did not (completely) comply with the needs of the users. The underlying problem was that scaling up projects led to more complexity in these blueprint approaches. There was a backlash from within these organisations as well as wider society/consumers. Organisations readily cut up projects into smallest chunks capturing information and communication technology developments in which the future developments were being anticipated and acted upon, without exactly knowing the next stage. From a world of top-down projects, which were previously scoped out and then implemented, organisations have developed in the direction in which they use a more emergent way of working. A way of working where things can be created spontaneously, where the sum of all parts is more than the total and where projects are not completely planned out at the start. We develop new things, work with “trial and error,” and apply market dynamics as innovations emerge. In the Familiar and predictable scenario the long-established and large-scale information and communication technology projects were widely recognised as having failed to deliver project objectives. For many organisations it proved increasingly difficult to direct projects from a central point in the information and communication technology function. It became clear to the information and communication technology industry that ever-larger projects gave serious implementation issues that would not be controllable. Many organisations realised that they would fall behind societal experiences and expectations. For example, people commuting to work on trains were busy on their smartphone or tablet, yet when they got to their workplace, they could not use their devices as they were not connected to the business systems and processes. Frustration grew and organisations realised that their work practices were inefficient. Increasingly user-unfriendly information and communication technology developments emboldened and empowered the end user to question the current systems and to determine themselves what should be developed and implemented. The information and communication technology developments were not restricted to what was technically feasible but became more dependent on what users could grasp. Over time the focus was on the

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practical feasibility of projects and how the current business systems and processes support (or limit).

Insights and Implications For PRBV they developed a deep understanding of the choices around governance and change around asset management, operation, and information and communication technology. They identified a dilemma around intelligent design compared with an evolutionary process. As one exchange between senior managers highlighted the dilemma: “If PRBV followed the business-as-usual approach, change will be too little and too late”. “There are other possibilities rather than plan the big system change, with step-by-step implementation on a more organic, spontaneous evolution”. “Information and communication technology is growing leaps and bounds. Such exponential growth leads to major information and communication technology problems, we will grind to a halt”.

The situation around governance was amplified a few moments later: “We have the big picture conversation; how do we interpret?” “For government it is a political answer. For PRBV we need to deliver the project”. “We have an infrastructure legacy, what are the breakable links? What are the unbreakable links?”

One member of the senior management developed a pictorial representation of the situation facing PRBV, to highlight the challenge of the blueprint approach. There were two interlocking feedback loops. The first feedback loop described the relationship with the internal information and technology team leading the development of the blueprint approach, managing project scale and scope, which reinforced their position over time. The second feedback loop identified how, given the length of time to deliver the project, the outcome would result in less and less relevance for users. ‘blueprint’ approach

Throughput time of a project

Project scope

REINFORCING

ICT function is leading

BALANCING

Support by users

Figure 31: The ‘blueprint’ challenge map.

Project relevance at delivery

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Developing such a pictorial representation helped the management team reflect on the insights from the scenario process. They had become increasingly sensitive to the (potential) unintended consequences of the blueprint approach for asset management, operations, and information and technology. As one senior management commented on ‘seeing’ the pictorial representation: “The expression – we can’t see the wood for the trees springs to mind!”

The strategic conversations throughout the scenario process helped the management team reframe the long-accepted approach to project definition and implementation. The scenario process identified different possibilities for project design and implementation which they explored in the here-and-now. One senior management commented: “We can be victims of naivety. We think magic will happen”.

Conclusion: Case Study Insights, Time, Reframing, and Strategic Conversations with Scenarios In each of the four case studies set out and discussed above there is one common feature, the management teams all developing new, insightful, revealing, and challenging understandings of the world in which they were operating in the here-and-now. Much is written about scenario planning, foresighting, and other such techniques that the outcome is a variety of ‘images’ or ‘stories’ about possible futures that may (or may not) happen at some future point in time. Management teams are alerted to watch for events and conditions that indicate a particular future is occurring. They have previously developed a range of strategic options to cope with such conditions. However, these case studies challenge such views and understanding. The new, insightful, revealing, and challenging understanding of the world in the here-and-now helped these organisations to reframe their beliefs and assumptions about their organisation. In the first and second case studies the management teams were able to redefine their organisation, in the here-and-now, by understanding the emergent patterns in their world. Doing so helped them harness the emergent patterns that they had previously not seen or understood. In the third case study the Alliance participants developed and defined a new understanding of their world which would fundamentally challenge their ways of doing business. The fourth case study developed a deeper understanding of the management team’s dominant mode of thinking and acting which would be challenged through technological innovation, leaving them open to criticism that they were unfit to manage the national rail network. They would likely miss opportunities to harness technological innovation if they waited for the development of the ‘blueprint’ for the future. Knowing what an organisation needs to avoid is a key insight from this case study. The management team evidenced an openness disposi-

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tion (Burt, Mackay, van der Heijden, Verheijdt, 2017) rather than a rejection of their insights. If the organisation continued with its business-as-usual assumptions, these assumptions were likely to lead to a deterioration in organisational performance, and credibility, over time. The argument and evidence presented in this chapter and throughout the book about scenarios as strategic conversation highlights and emphasises one aspect of the scenario process that is underdeveloped, which is how to understand time. This situation is recognised in the wider management and organisational literature where “there is a gap in our understanding of the activities through which actors address distant pasts and futures (Hernes and Schultz, 2020, p 3). Traditionally in scenarios time is considered chronological, or ‘Newtonian’ time. Chronological time influences the way participants consider the past and present, and how that influences their thinking about the future. The past is seen as fixed and settled, rather than negotiable and open to interpretation and re-interpretation. As the world is constantly changing it requires to be constantly negotiated and re-negotiated. There are two aspects in the process of translating the distant into the present – temporal translation and temporal structures. Temporal translation involves two distinct yet interrelated processes. These are ‘displacement’ of objects and ‘transformation’ of objects and the integration into existing knowledge. “The underlying idea of temporal translation is based on working from the present towards the distant past or future and that working from the distant past or future towards the present would take place simultaneously, both being translated through temporal structures” (Hernes and Schultz, 2020, p 16). “Temporal translation implies actors, through their activities, translate situated activity and distant events into their ongoing temporal structures. They evoke displaced distant events into their temporal structures while transforming those events so that they make sense in relation to their ongoing temporal structures” (Hernes and Schultz, 2020, p 16). Reflecting on the first case study as an exemplar, participants connected their scheduling and production systems to customer EPOS systems with real-time information flows, whereas previously, scheduling and production systems were bounded, remote, and not related to customer EPOS systems. Response to customer orders was time bounded, reactive, and disconnected from past experiences. Consequently, this approach influenced the processes and routines within CBC in an inertial manner. Using the insights from the scenario process CBC reinterpreted customer orders and information flows to redefine their operations and innovate through the introduction of the ‘Customer Service Centre’. “Temporal structure describes past and/or future activities and events that actors reproduce through their activity, and the scope of those structures describes the temporal distancing of these activities or events from the present (Hernes and Schultz, 2020, p 5).

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Furthermore, “events are not defined by their duration but by their particular significance for the organisational actors” (Hernes and Schultz, 2020, p 5). “Distant events, we do not mean in a chronological sense, but, rather, as that which lies beyond the scope of actors current temporal structures” (Hernes and Schultz, 2020, p 5). The three scenarios indicated that ‘information is king’ and that future events derive from and are rooted in the spontaneous activity of the present (Schutz, 1967). Foresight with scenarios happens in the here-and-now. How? “Actors respond to their own interpretations of past events or imagined future events, which may become embedded in and eventually transform the temporal structures of actors” (Hernes and Schultz, 2020, p 7). The scenario process is a situated activity, generating insights, whether a specific opportunity or threat, that transform temporal structures. Temporal structures include day-to-day activities and routines, infrequent non-routine activities, and remote or distant relationships and actions. The insights from the scenario process shorten the transformation of temporal structures. This occurs as actors/participants step outside of the constraints of their current temporal structures and begin to redefine and imagine the basis of organising in the future. The scenario process is now understood as connecting lived experiences from the past, connecting them with recent and/or current experiences in the present, transforming them into new knowledge and understanding in the here-and-now. The transformation is both retrospective and prospective in nature (Schutz, 1967). This is a new, contemporary, and alternative way of understanding the scenario process and its potential to help management teams.

References Amara, R., Lipinski, A. J. (1983) Business Planning for an Uncertain Future: Scenarios and Strategies, Pergamon Press Inc., Elmsford, NY von Bulow, C., Simpson P. (2022) Negative Capability, In, C. von Bulow and P Simpson (eds), Negative Capability in Leadership Practice: Implications for Working in Uncertainty, Palgrave MacMillan, Switzerland, pp 21–32 Burt, G., Mackay, D. J., van der Heijden, K., Verheijdt, C. (2017) Openness disposition, Readiness characteristics that influence participant benefits from scenario planning as strategic conversation, Technological Forecasting and Social Change, 124, 16–25 Chan,W.-T. (1963). A sourcebook in Chinese philosophy. Princeton, NJ: Princeton University Press. Eisold, K. (2000) The rediscovery of the unknown: an inquiry into psychoanalytic praxis, Contemporary Psycho analysis, 36 (1), 57–75 van der Heijden, K. (2005) Scenarios: The Art of Strategic Conversation (2nd ed.) John Wiley & Sons, Chichester van der Heijden, K., Bradfield, R., Burt, G., Cairns, G., Wright, G. (2002) The Sixth Sense: Accelerating Organizational Learning with Scenarios, John Wiley & Sons Limited, Chichester. Hernes, T., Schultz, M. (2020) Translating the Distant into the Present: How actors address distant past and future events through situated activity, Organization Theory, 1, 1–20

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Jullien, F (1995) The Propensity of Things: Toward a History of Efficacy in China, Zone Books, New York March, J. G. (1995) The Future, Disposable Organizations and the Rigidities of Imagination, Organization, 2 (3/4), 427–440 Schutz, A. (1967) The phenomenology of the social world, Heinemann Educational Books, London Watzlawick, P., Weakland, J., Fisch, R. (1974) Change: Principles of problem formulation and problem resolution, W. W Norton& Company, New York

Chapter 5 Coping with Surprises and Potential Disruptions: Towards an Understanding of the Role of Negative Capability Negative capability is a state where someone “is capable of being in uncertainties, mysteries, doubts, without any irritable reaching after fact and reason” (Keats, 1899). The root meaning of ‘capable’, like ‘capacity’ and capacious’, though not ‘ability’ and ‘able’ is ‘containing or specious. They are derived from the Latin word capex, able to hold much (French, 2001, p 483).

Introduction In the previous chapter the case studies that were presented revealed how the management teams initially identified challenges, issues of concern, and possible opportunities. These issues emerged from a series of one-to-one interviews prior to the start of the scenario project. These interviews were analysed, themes identified, and themes consolidated to then be shared in workshop one. The insights that they developed from the scenario process show how they opened up their thinking and identified how the changing world was impacting their organisation. How did the management teams cope with their insights and revelations about the changing world? Did they cope or did they revert to their business-as-usual thinking and ways of working? This chapter explores and discusses how the case study management teams coped when engaging with the ambiguity and complexity surrounding their organisation. Ambiguity is considered as multiple potential interpretations of lived experiences, which need to be socially negotiated to build shared understanding. People create meaning about their situation with others (Antonacopoulou and Gabriel, 2001; Voronov, 2014). Uncertainty is traditionally considered as confusion about a situation given a lack of facts, knowledge, and collective understanding. Again, there is a need to socially negotiate to build shared agreement (Eden, 1992). Shared understanding is key to developing insights and foresight. However, managers are caught between the desire for certainty and having to give time to engage and build shared understanding of their situation. The scenario planning process is designed to help an(y) organisation engage with its changing world; as the process unfolds, participants are unsure of the journey and outcome. As insights emerge these can be unsettling, as the revelations both surprise and disturb assumptions, perceptions, and prior understanding. Anxiety increases as there is a realisation of ‘not knowing’ what has occurred and what is occurring in the

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organisation’s changing world. However, “this experience or state of not-knowingwhat-we-are-doing can be extremely practical, providing we can deal well enough with its negative manifestations (our anxiety and uncertainty, for example, or the sense of futility or fear of incompetence). To know why things are the way they are, we need to attend to those elements of our experience that we normally avoid, deny, or repress, to learn from the unknown” (French and Simpson, 1999, p 217). The constantly changing world is considered as the undifferentiated flux and flow of lived experiences which appears and disappears, which is latent and hidden (Whitehead, 1978; Jullien, 2004). World-making and foresight with scenarios is about making the undifferentiated, the latent, and the hidden visible. Hidden may come from several sources. First, the intentions and actions of key stakeholders that are either not detected or detected but not understood. Second, the complexity of language and the multiple meanings and interpretations implicit and explicit inherent in words. Third, the issue of time and space and the focus of a management team on the achievement of their goals in the future, without a heightened sense of events and experiences from the past. Events and experiences can be interpreted and reinterpreted and are not time dependent. Events and experiences that are remote from the organisation, either considered irrelevant or not seen, are not location dependent and may be relevant and connected to the organisation. A feature common to both CBC and CLCS case studies was a lack of understanding of the changing world and how it was impacting each organisation. Were there any insights about, or insights hinted at, in the in the initial interviews?

Insights from Initial Interviews For CBC, vulnerabilities raised and noted during the interviews covered two pages out of a total of thirty-five pages. The scope of the vulnerabilities covered: (i) the reliance on two main whisky brands, (ii) alcohol health-related scares, and (iii) environmental concerns from ingredients through to packaging. Comments on competition covered one and a half pages with three main themes: (i) efficiency in bottling operations; (ii) relationships with supermarkets and ‘buyers-own-brands’, sometimes called fighting brands, which did not compete with key distiller-owned brands, but there was a concern about their role for the supermarkets; and (iii) the potential for pricebased competition that would reduce overall industry profitability. For CLCS, there was a sense and belief that there would be no change in their customer needs and their knowledge and capabilities to support customers and fulfil demand and their customer needs. Demand for CLCS services was increasing and there was a sense of optimism that this would continue in the future. Quotes from the interviews:

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– “The industry will continue to grow”. – “Our success will depend on the timely perception of the market, of the work to be done, so that such work is reasonably spread out”. – The next five years should be safe as far as demand is concerned, with current factors creating a backlog of other work that has been left”.

There was also a view that CLCS had a differentiated position in the market: – “Our experience-based approach is a real differentiator in the market”. – “The combination of integrity and experience is the crux of the matter”. – “What customers buy is CLCS quality of people, local support, and a track record on implementation. – “We can call on fifty people in Scotland for a reference. As a consequence, we are the largest independent software company in Scotland, established for twenty years”.

There was no sense of a major threat to CLCS. There was only half of one page of comments on competition. There was limited recognition of competitors: – “A lot of our skills are fairly package independent and related more to solving business issues and project management. Shifting to another package would be difficult but not impossible”.

The recognition of unseen disruption was a key revelation from the scenario process for both management teams. For CBC power-shifting from ‘whisky is king’ to ‘information is king’ through supply chain developments. For CLCS the role of IT consultants shifting from ‘relieving’ and reactive problem-solving to ‘enabling’ customer growth and development given technological innovations. Given such revelations, did and how did the management teams cope? They could ignore or disregard the revelations. They could embrace the revelations. Embracing the revelations requires an openness disposition within individuals (Burt, Mackay, van der Heijden, Verheijdt, 2017).

Coping with Insights and Revelations from the Scenario Process: The Role of ‘Negative Capability’ An ability to live with anxiety arising from uncertainty and remain patient to search for a sustainable solution requires managers to tap into their untapped ‘negative capability’ disposition and aptitude. Negative capability requires an openness disposition, a willingness to question assumptions, and an inclination to search for alternative meanings, hidden visions, and counter-intuitive insights in problem-solving activity. Negative capability involves “the process of initiating an unforgetting that enables individuals to momentarily estrange themselves from their symbolic universe of discourse, suspend their haste in wanting to know, and to listen and mediate on those sensual experiences which would otherwise be lost without trace in the confusing bombardment of signifiers that continuously operate to disorientate, seduce and distract us” (Chia and Morgan, 1996, p 55). The scenario process, as strategic conversa-

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tion, helped participants, in both cases discussed previously, to create new language and new understanding of their situation. For example, moving from ‘whisky is king’ and the familiarity and comfort of the ‘Producer world’ to appreciating the changing world. The ‘Distributor world’ and ‘Provider world’ opened up the management’s team’s understanding of the limitations in their assumptions and language. The ‘Distributor world’ and ‘Provider world’ created new language, new understanding, and new possibilities. Negative capability is about staying open, being patient, observing, and not drawing out premature conclusions to ambiguous, complex, and uncertain situations. It is about relational engagement to make the invisible visible through a “coming-topresence” (Cooper, 2005, p 1706). The “coming-to-presence” for the whisky management team was the realisation of the emerging shift of power and control of their organisation through supply chain actions by key stakeholders. Negative capability occurs in moments of insight represented in the narrative constituted as “epiphany moments” (Denzin 2001; 2014). Denzin sees epiphany moments as illuminative moments when “underlying tensions or problems in a situation or relationship are revealed” (2001, p. 37). They are revelatory for the person in terms of their own meaning making in the world, “something new is always coming into sight, displacing what was previously certain and seen” (Denzin, 2014, p. 1). Epiphany moments are moments of revelation that emerge often from challenging or troubling experience; they are “small transformative moments” that can “shift the borders of our self-understanding” (Todd, 2014, p. 232). They are “small moments of grace, those instants of living transformation” that offer “texture and depth to our everyday engagement” (2014, p. 243). Epiphany moments reveal the hidden ‘propensity of the moment’ (Jullien, 1995; Jullien, 2004). For CBC their epiphany moment was: Participant 1: “I am depressed, we are being stuffed by our customers. We are locked into the risk of our customers”. Participant 2: “We give value. We create value for others. Why? Should we change? We take a worthless product and create value in the process”. Participant 3: “We produce the complete package – blending whisky, bottling, packaging, and warehousing. Are we jumping to conclusions?” Participant 4: “Does the brand owner own the customer? Is it the distributor that owns the customer? Is it the payment system that owns the customer?”. Participant 5: “This is challenging my thinking. It is not about needs but creating value. This has blown away my ten years of previous experience”. Participant 5: “This value creation thing – is it a reversal into the supply chain for us? We should provide a full customer service with direct ordering placed with CBC”. In that moment the CBC participants began to comprehend their view, and limitations of their view of the customer. By focusing in the past on quick response to customer

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orders they realised that this contributed to the dilemmas that they were facing: (i) produce for stock and fulfil when order received or produce for customer order when order received; (ii) flexible production lines or lines dedicated for products; and (iii) flexible production lines or lines dedicated to customers. For the CLCS their epiphany moment was: Participant 1: “Solutions drive our business; our customer defines the problem, and we provide the solution”. Participant 2: “There is another way of looking at customers, by not looking at solutions but by looking at making the customer more successful”. Participant 3: “We should start from the business perspective, not the problem-solving perspective”. Participant 4: “Our problem is that we see the customer as a prospect for our next job”. Participant 2: “We sell our product to make revenue”. Participant 3: “We have no post-sales structure; we worry about billing”. Participant 5: “Our only engagement with the customer about their business is only at the pre-sales stage”. In that moment the CLCS participants began to comprehend their view, and limitations of their view of the customer. By focusing on reactive problem-solving they realised that they did not engage in fully understanding the customer’s business or with how to make their customer successful. The CLCS philosophy was: ‘You say – we do – we bill – you pay’, and this work-and-bill ethic has been retained” (extract from scenario project summary document). The philosophy was now challenged. Relaxing and releasing key beliefs and assumptions, as well as recognising the limitations of the dominant language that underpinned their historical modes of thinking and acting, opened up moments of novel and innovative understanding about the organisation in its changing world. Overcoming historical modes of thinking and acting, the basis of everyday performance, is a crucial challenge. However, “the principle of performativity (what we know and can get done) which essentially involves the subordination of knowledge and truth to the production of efficiency in order to meet the demands of key stakeholders” (Edmonstone, 2016, p 140) is a significant barrier to novel insights. The scenario process, with the conversational focus of developing the scenario stories, helped unearth the hidden, beyond-everyday understanding that participants had about their changing situation. Business-as-usual is the normative way of acting as there is no felt need to change. The scenario process reveals what was previously unthinkable and untalkable. Once the stories about the wider understanding of their situation are talked into life the key is to harness the emergent and novel insights and begin to search for the logic of organising. In the two case studies there was now a

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felt need and this resulted in the reframing of their organisation, overcoming the selfimposed boundaries and limitations of beliefs and assumptions. For CBC, learning, unlearning, and reframing was based on redefining the boundaries of the organisation as well as the relational interactions with customers and key stakeholders to gain data, information, and intelligence about demand for whisky and spirits products. By gaining access to data, information, and intelligence CBC were able to more efficiently plan and schedule production, enabling them to better control costs through economies of scale. They reduced the need for production in advance of customer orders, which helped them manage working capital more effectively. They were also able to respond to customer requests as they had information that indicated when orders would be forthcoming before the order was received. For CLCS, learning, unlearning, and reframing was based on redefining the approach to service delivery, changing from ‘a total solution’ where the client defines the problem and CLCS solves the problem, to a service delivery based on ‘providing an enabling service’ where both parties work together to define and solve the problem helping the client to grow their business. ‘Providing an enabling service’ required them to take a more holistic view of their customers, integrating business knowledge with appropriate technological knowledge and services.

Negative Capability and the Role of the ‘Surprise-Free’ Scenario “Not knowing tends to stimulate high levels of uncertainty and anxiety and is a threat to fresh thinking” (Simpson and French, 2006, p 251). So, if the scenario planning process is about addressing uncertainty, why would individuals/management teams wish to participate given the potential to increase anxiety? Not knowing is the starting point for a scenario project; if the area of concern was clear to a management team, then there would be no need to undertake a scenario project. And not knowing continues through the scenario process. This can be unsettling as the outcomes are not evident, and they may be disconcerting when the outcomes emerge. Therefore, negative capability is about finding and encouraging “precisely the ability to tolerate anxiety and fear, to stay in the place of uncertainty in order to allow for the emergence of new thoughts or perceptions” (Eisold, 2000, p 65). So, how and why does the scenario process stimulate new thoughts and ideas? Why would individuals be patient to live with a lack of clarity during the scenario process? The relational interaction between participants is shared, and together they strive to find the solution to their problem/issue or area of concern (which may evolve during the process). As they progress with the scenario process they realise and understand the importance of the evolving situation for their organisation. The realisation was helped by the “surprise-free” scenario (Wack, 1985, p 77), their expected view of the future, which, although it was developed by the participants, was unlikely to occur as they have articulated other scenarios which undermined those expectations.

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The surprise-free scenario “represents the common traditional wisdom of the organisation, a scenario based on the expected future, which can anchor the set of scenarios in the existing belief system of the decision makers. This ‘link with the old world’ serves as a basis for recognition of change” (van der Heijden, 2005, p 270). The development of a set of scenarios helps to open up the thinking of the participants to new possibilities. For CBC the ‘surprise free’ scenario was the ‘Producer World’ which was based on the long-established view that ‘whisky is king’. Whisky was understood as the scarcity in the marketplace, and power therefore would be held by the whisky producers. Interestingly, the original reason for the scenario project was to understand the opportunities in the wider international whisky and spirits market. Expansion internationally would be based on ‘whisky is king’. However, the unseen and emerging issue revolved around innovation in technology, especially in the supply chain, which resulted in stakeholders wrestling control away from producers. The evolving scarcity was hidden from the management team. Their operational and production focus limited their view. These changes were recognised as the ‘propensity of the moment’ (Jullien, 1995; Jullien, 2004), and if CBC harnessed these insights, they could redefine their (organisational) boundary and capture real-time information flows to improve their production planning. For CLCS the ‘surprise-free’ scenario was ‘Bare Essential’ where economic difficulties drive down the demand for IT consulting services, and business investment in technology declines leading to a wider industry restructuring with a decline in small players. CLCS were increasingly facing competition – known and new entrants, losing customers without fully understanding why they were losing customers. There was also an increase in the number of businesses recruiting their own information technology staff. Their approach based on providing the ‘total solution’ for customer problems was in decline as clients asked for fewer services and solutions. For CLCS the other two scenarios highlighted the role of software innovation and its impact on businesses, the changing nature of the internet, and its impact on businesses – regardless of size. These changes were recognised as the ‘propensity of the moment’ (Jullien, 1995; Jullien, 2004), and if CLCS harnessed these insights they would open up the possibility to be a first mover to provide new services and a new approach to consulting. In both case studies, the other scenarios, developed by the participants from the originally agreed areas of uncertainty and concern, revealed what they could not see. By seeing what they could not see, they simultaneously realised the limitations of their situation and the new possibilities that were not previously evident or considered. It was the participant’s self-generated thinking that resulted in the realisation of these possibilities. For CBC the possibilities were emerging from innovation in the supply chain. For CLCS the possibilities were emerging from technological innovations that would help them help and enable their customers to grow their business. The outcomes from the scenarios enabled the participants to be ‘in the moment’ (French and Simpson, 2006) reducing any anxiety. ‘In the moment’ opened up new

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possibilities to the participants. The participants were subsequently able to redefine their concerns about their changing world. These are ‘moments’ when the participants harnessed their latent ‘negative capability’, stayed open, and harnessed their insights, even though they may be unaware of ‘negative capability’ as they did not succumb to their existing assumptions or ignore or reject the insights from scenarios (which were their creation). The participants moved from not knowing to knowing in the moment. They did not have a fully-fledged action plan at that moment; however, with their insights they were in a new place of understanding which would evolve with further consideration.

Novelty and the Seduction of Stability There is an unpredictability about the behaviour of participants during the scenario process. Some will remain open, and some will be uncomfortable and seek familiarity. Negative capability can occur at any moment during the scenario process. Individuals will consider, struggle with, and explore their own and other participants’ thoughts and ideas about uncertainties. This is likely to be discomforting as the desire for certainty may result in premature closure on exploring uncertainties. Premature closure will result in “avoidance of difficult questions, myopic thinking, repression of doubt, and the stifling of reflexivity, leading ultimately to ‘self-reinforcing stupidity’ (Alvesson and Spicer, 2012: 1194) that leaves no space for inquiry and improvements” (Saggurthi and Thakur, 2016 p 181). An example of a moment of CBC discomfort was: Participant 1: “We are facing different types of risks”. Participant 2: “Is customer education worth the investment?” Participant 3: “We need to understand the customer, customer by customer”. Participant 1: “I don’t understand this, why don’t we move on?” The connection between CBC and the value creation process had not been made at that point in time. The value creation process was beyond a product or service; it embraces every aspect of the interaction with a customer, as well as any intermediaries involved in the process. The business-as-usual mode of thinking was around operational efficiency; thus, time was seen to be precious, so Participant 1 was anxious to move on. An example of a moment of CLCS discomfort was: Participant 1: “We understand the problem, we will solve it for you”. “We are like McDonald’s focusing on the consistency of the product”. Participant 2: “The transaction length needs to be forever, how to maintain that level?” Participant 3: “That is the relieving approach”.

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Participant 2: “The relationship is forever”. Participant 4: “Are we product or are we service?” Participant 5: “We are asked in by the client and take the initiative to solve their problem”. The complexity of developing an ‘enabling’ mode of consulting was beyond delivering solutions to known problems which were deeply rooted in the CLCS mindset. CLCS prided itself in the problem-solving/relieving mode of interacting with customers. Problem-solving was seen as a primarily technology-related matter. The scenario process is not a problem-solving approach. The nature of ambiguity and uncertainty is such that issues considered as ambiguous and uncertain are likely to be vague, replete with many aspects, connected to other hidden important elements, and subject to multiple interpretations. Therefore, ambiguity and uncertainty are not subject to rational analysis or breaking uncertainty down into smaller elements and form the basis of focused action. The opposite is the case. Uncertainty requires a mindset of openness, a willingness to preclude immediate judgment, and it requires patience for the emergence of new insights and understanding. Openness to all ideas, even if counter-intuitive and seemingly contradictory, requires patience to suspend the desire to act and requires a willingness to question one’s own and others’ assumptions. This requires encouraging a search for the hidden aspects of events, appreciating other non-obvious perspectives on events, and a determination to help others avoid making premature decisions and actions. Understanding new lived experiences even when they challenge beliefs and deeply held assumptions is a fundamental requirement to understand the changing world.

Scenarios as the ‘Container’ of Ambiguity and Uncertainty In a management context negative capability “implies containment and the capacity to endure rather than the capacity for active intervention: the cultivated resilience to resist premature closure in the face of vagueness, uncertainty and equivocality” (Chia and Holt, 2011, p. 211). Uncertainty, dramatic change, and sudden shifts in contextual environments are widely recognised as one constant of organisational life (see chapter 1). Scenario projects and processes are designed to enable exploration of uncertainties and concerns faced by an organisation, no matter its size or context. So, what is the container in scenario projects? Scenario projects start with interviews of all members of the management team. From the collective interviews an initial focal issue(s) or question(s) is collectively agreed upon. However, understanding of an initial focal issue or question can shift throughout the process, and as that shift occurs it requires tolerance and openness to acknowledge the fluidity of the situation and to let the process unfold over time. Paradoxically, the unfolding situation is likely to create even more uncertainty as the jour-

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ney becomes unpredictable. With such unpredictability making sense of uncertainty will increase the level of anxiety which in turn may result in avoidance and dispersal. So, how and why does the scenario process act as a ‘container’ and help individuals cope with such a situation? For CBC the collective interviews covered thirty-five pages, with one-quarter of one page dedicated to supermarket ‘own brand labels’. There was one single comment about supermarkets: “We are starting to feel the power of the supermarkets over suppliers. Before we used to talk to the operations people in brand ‘X’. Now we talk a lot with their customer service department, who in turn are under pressure from supermarkets”. There were no other comments about supermarkets in the ‘vulnerabilities’ section of the interview report. Comments on ‘investments’ were focused on production facilities. There were no comments on supply chain management. For CLCS the collective interviews covered forty-two pages, with one page dedicated to ‘customer value’. On one of the pages, keywords that were present about the engagement and relationship with customers were: honesty, integrity, performance, and excellence and give comfort, quality service, experience as the differentiator, localness, and ‘can-do’. At this juncture the emphasis was on ‘relieving’ customer problems, with only one comment, namely “we can do more, help you expand,” that was beyond ‘relieving’. On the page capturing comments about ‘demand’ there was a vagueness about the types and nature of services that will be delivered in the future. There was no sense of an alternative mode of service delivery. The remainder of the report was predominately focused on internal issues. So, at the outset of the scenario project, for both case study organisations, the ‘container’ was limited in scope. For CBC the three scenarios that the management team developed, ‘Producer world’, ‘Provider world’, and ‘Distributor world’, depicted the emergence of new ‘rules of the game’ where existing industry stakeholders and non-industry invaders compete for ownership of the consumer. ‘Information is king’ as both industry stakeholders and non-industry invaders harness technological innovations to develop new ways of connecting with consumers. The logics of connecting with consumers initially started with the launch of the ‘Tesco Clubcard’, the launch of ‘Friends Re-united’ in 2000, and the growth and escalation of social media organisations that gathered and developed consumer profiles and were increasingly looking to ‘monetise’ these assets. These changes were ‘hidden’ from CBC, who were focused on distilling and blending whisky and international market expansion to reduce the pressure on prices from domestic supermarkets. The scenarios helped the management team recognise the need to get closer to the source of consumer demand. They also recognised that the random and unpredictable nature of order replenishment by the supermarkets was both the source of their problem and the solution to the problem. They recognised that they needed to link their production and scheduling systems to the supermarkets’ economic ordering quantity systems. By doing so they could manage production more efficiently, reduce the need to

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produce for storage, and better manage working capital, as well as provide a more effective process of product replenishment for the supermarkets. For CLCS the three scenarios that the management team developed, ‘Tough Choices’, MS Rules OK’, and ‘Bare Essentials’, all highlighted the transition over time the nature of the software industry would change. Software innovation would ease the challenge of maintenance. New entrants and new products would disturb the software industry. In all three scenarios change would not be beneficial for JBA, the main software supported by CLCS, which surprised the management team as JBA software was central to their business. Whilst the initial interviews highlighted concerns about the relationship with JBA, these concerns were lessened given the installed base of JBA software that would be required to be serviced by CLCS. However, CLCS saw possibilities in the software industry that they had not conceived prior to the scenario project. These possibilities were based around the B2B and B2C developments which would open up the possibility of developing an ‘enabling approach’. The range of challenges and possibilities were identified equally across the three scenarios, which helped the participants remain open and not reject the outcomes of their collective thinking. The scenario process enabled individuals to project and transfer their fears, anxieties, concerns, and uncertainties in a structured manner, with other participants also doing the same. As the scenario process unfolded there was a counter-transference of insights and revelations from the scenarios to the participants, emerging through and from their dynamic dialectic exchanges, which helped in reframing the situation under consideration. The scenario process acted as a container for the concerns and uncertainties of both case study organisations, providing a safe space for exchanges and discussions that enabled the exploration of uncertainties and/or concerns which helped to prevent premature closure. The safe space enabled the participants to bring to life unthought ideas or unarticulated ideas, helping them engage and explore uncertainty. The scenario process enabled the ‘unthought’ to be thought, the ‘unarticulated’ to be articulated, the ‘hidden’ to be revealed and shared collectively. Absorbing the insights and implications of the scenario stories, the participants were ‘thinking in the moment’ (French and Simpson, 2006, p 245). Remaining in the moment lasted beyond the elapsed time of the scenario-building workshop. In each of the case studies participants reconvened at a later date to continue to discuss and explore possibilities. There was no clear-cut action plan at the end of the scenario-building workshop, nor was there a fixed position in future meetings. In subsequent meetings and workshops, the participants reviewed their situation and created an agenda of issues to be considered, developed, and undertaken which ultimately would help them develop their respective action plan. Interestingly, neither of the case study management teams rejected the outcomes of their scenario process in subsequent workshops; they undertook subsequent research that helped them develop more comfort about the scenario insights. Interestingly, one participant noted at the start of a subsequent meeting that he “saw ghosts where previously none existed” whilst reading the business section of a

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newspaper. Such a statement indicates that the scenario insights were retained and helped the participant to make connections that would have otherwise been missed. There was a heightened awareness of events and how these were interpreted through the lens of the scenarios. When confronted with uncertainty, as well as insights from the scenarios process, the participants could have avoided discussing uncertainty and rejected the insights that they generated. So, why did participants not act in a dispersal mode? What helped them absorb and cope with the insights from the scenario process? A digestive period allowed time for reflection on the implications of their scenarios. This is especially important when the history of the organisation is profit and growth year on year and the organisation is currently profitable. The realisation that the scenario stories helped them develop insights about their changing world stories provided them with original and novel information about their situation. The stories revealed the hidden agendas and motivations of stakeholders and third parties that would undermine their business. They were not helpless and needed to formulate a response that would harness their insights and benefit their organisation. Staying open was fundamental for them living with uncertainty. Scenarios work on the edge between knowing and not-knowing, revealing the not-knowing in what we are doing in our practice as participants explore their uncertainties and concerns. Not-knowing emerges from the insights generated by the scenario process, from the ideas, the exchanges, the debates, and the disagreements about the stories that emerge from the strategic conversations. Not-knowing is linked to ‘truth-in-the-moment’, that is, foresight in the here-and-now. The revelation from the scenarios provided new understanding and, in the circumstances of the case study management teams, a movement away from their initial focal concern to a redefinition of the contextual setting. Boundary constraints are removed which resulted in a wider conceptualisation of the basis of organising. Whilst there were insights in the here-and-now, the management teams both remained open after the scenariobuilding process and considered, contemplated, and challenged their insights without reverting to tried-and-tested solutions. The scenarios acted as a container of uncertainty for these management teams, helping them remain open to the possibilities.

Scenarios, Negative Capability, and the Search for the Basis of Organising The widely accepted next stage of the scenario process would be to map out the implications of the set of scenarios, scenario by scenario. From there the participants would develop strategic options to respond to the implications of each scenario. These strategic options would then individually be ‘wind-tunnelled’ for suitability and sustainability in each scenario. Any strategic option that passed the ‘wind-tunnelling’ test would then be considered for implementation in the future to change the organisation (van der Heijden, 2005; van der Heijden, Bradfield, Burt, Cairns and Wright, 2002).

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However, the case studies presented here offer a new and novel way of thinking about the basis of organising. In the CBC case the management team believed that ‘whisky is king’ and their focus was on all aspects of the whisky production process, from distilling to customer order fulfilment. However, the customer order fulfilment was problematic due to unpredictability in timing and quantity of customer orders. The insight that emerged from their strategic conversation with scenarios was ‘information is king’. This insight was developed without any reference to the widely accepted process deployed in the scenario implications workshop to generate strategic options and then to wind-tunnelling the strategic options against the set of scenarios. The ‘information is king’ insight helped the CBC management team reconsider their perceived organisational boundary. Without ‘information is king’ the CBC management team would have focused on strategic options aligned with ‘whisky is king’. The CBC management team responded to their new understating of ‘information is king’ by suggesting and then conceptualising the ‘Customer Service Centre’. The ‘Customer Service Centre’ would be designed to link all aspects of the whisky distilling process to the customer order fulfilment, by capturing real-time information flows from the supermarkets’ electronic point of sales (EPOS) systems and connecting this information to the CBC production planning and scheduling capability. By doing so they were able to overcome the various dilemmas around the nature of production and utilise their bottling facilities in a more efficient manner, as well as managing incoming supplies of dry goods, for example, bottles, packaging, etc., that would help improve their working capital management. In the CLCS case providing the ‘total solution’ would leave them vulnerable to the changes that were occurring from software innovation. The ‘total solution’ approach was based around a belief that the customer would contact CLCS when they had either hardware or software issues and CLCS would resolve such problems. The software innovations would, however, help these customers, and businesses not yet customers, to expand the markets for their products, without necessarily having to relocate. For CLCS they became aware of the potential for e-commerce through third-party network investments and they recognised the potential for blurring of organisational boundaries and the potentialities that this would offer them. However, they recognised the limitations in their problem-solving relieving philosophy. In addition, they recognised the limitations of the JBA software which was not able to cope with the potential of the network innovations. The CLCS management team also recognised that they had no capability to capture the ‘enabling’ possibilities. CLCS staff were predominately software programmers, lacking in business advice and strategy consulting. Enabling required a change in mindset. There was a recognition by the CLCS management team to stay open; overcome their anxieties about enabling; and remain staying open, engaging, and not searching for familiar answers. Opening up leads to recognition of limitations and understanding of vulnerabilities, both situations resulting in absorptive or dispersal actions, which results in closure of what we don’t want to hear or see.

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The CLCS management recognised that ‘enabling’ included an approach that makes it possible for their client to be better at what they do. It would require a consulting approach based on collaboration with the customer, rather than reacting to the customer, to configure activities and processes in the client’s systems to capture market growth opportunities. It would require an approach based on creating value for the customer rather than relieving the customer’s problems. This was a conceptual shift from providing the ‘total solution’ to providing an ‘enabling service’ as the basis of organising.

Negative Capability in Other Contexts Negative capability is widely recognised in many other contexts including management education and the dominance of language and how it blocks creativity (Chia and Morgan, 1996), school leadership and coping with change (Clarke, 2016), managing change in charities (French, 2001), management consulting with a top team (French and Simpson, 1999), crisis management and corporate responsibility (French, Simpson and Harvey, 2009), higher education with executive MBA students (Hay and Blenkinsopp, 2019), higher education and coping with change in institutional revenue patterns (Jamieson, 2012), adult learning and education and coping with epiphany moments (McCormack, 2018), adult education and personal reflexivity (Murray, 2018), management education and the ability to overcome barriers to self-learning (Saggurthi and Thakur, 2016), leadership and complex contract negotiation, avoiding closure and searching for meaning in others (Simpson, French and Harvey, 2002), leadership and understanding the dynamics of the moment (Simpson and French, 2006), psychotherapy and avoiding premature closure (Taylor, 2010), leadership and coping with financial challenges (von Bulow and Simpson, 2022), and education and working with hidden agendas (Unterhalter, 2017). Although there is a wide range of contexts where negative capability was explored, there are themes common to these articles, including (i) the role of culturally and socially established taken-for-granted language and how it limits managerial creativity and innovation in problem-solving (Chia and Morgan, 1996); (ii) engaging with change and a limited sense of the past and present (Clarke, 2016); and (iii) staying open and absorbing the situation (Clarke, 2016), welcoming not-knowing (French and Simpson, 1999), and willing to be vulnerable at not-knowing to open up space for new insights and understanding (McCormack, 2018). Staying open requires a disposition to avoid short-term dispersal actions when engaging with intractable problems (Edmonstone, 2016; French, 2001; French, Simpson, and Harvey, 2009) and seeking support from involved others (Hay and Blenkinsopp, 2019) to explore and broaden understanding. This can be uncomfortable as “negative capability in its ideal form includes a willingness to accept the kind of emotional disturbance which arises as a consequence of an open attitude” (Taylor, 2010, p 405).

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Absorbing uncertainty and seeing ‘truth-in-the-moment’ (French and Simpson, 1999) as “negative capability can be thought of as underlying the capacity to ‘hear’ the meanings that are often obscured as much as revealed by words, and then to convey them to others” (Simpson, French and Harvey, 2002), p 1217). Negative capability is yet to be explored in the context of scenario planning. The case studies and above discussions help show its relevance and role in scenario planning (and foresight and strategising), as negative capability helps individuals to be and remain open when engaging with uncertainty, constantly interpreting and reinterpreting experiences and identifying novel insights. There is a lot of mystery about scenario planning, its impact on management teams, and how it helps them cope with uncertainty.

Conclusion The scenario process affords time and space that “provides the safe environment for individuals to engage in transformative or self-directed learning through reflexivity and dialogical processes” (Murray, 2018, p 108). The scenario process connects participants to each other; it connects participants to individual and collective experiences; it connects participants to the wider happenings in the interconnected world. The interactions between the participants are designed to provide them with opportunities to explore their experiences, surface opinions, whether similar or contrary, explore and develop a shared understanding of any new discoveries or possibilities, and draw conclusions from their dialectic exchanges. During these dialectic exchanges novel insights emerged, with the simultaneous surfacing of limitations and possibilities around these insights. Willingness to accept the intimate relationship between limitations and possibilities is central to developing foresight in the here-and-now. However, during these exchanges, participants are confronted with emerging insights that challenge thoughts of continuity, thoughts of the perceived basis of business success and power. When surrounded by confusion and uncertainty the key disposition is to “let the mind be a thoroughfare for all thoughts” (Tsur, 1975, p 776) to open possibilities not previously considered or considered in the past but rejected as they were inappropriate at that time. How the participants cope with these challenges is based on the concept of ‘negative capability’. The ‘thoroughfare’ enables the flow of ideas in and out of the mind. As they flow in they are considered, captured, or rejected, in the context of the newly informed understanding of the situation. As they flow out there is a rationale that they do not relate to the newly understood situation. The thoroughfare is a melting point where existing ideas meet new ideas, collide, and integrate and where insights and foresight will emerge. The thoroughfare will be ‘busy’ with ideas and the danger is that it results in overload, and the temptation is to reject the thinking from the scenario process and fall back on old ideas. Such activity will result in premature closure, and the

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problematic situation arising in the future. Developing the tolerance to be patient, waiting for the situation to become clear, and then reinterpreting the organisation in this new understanding is the essence of foresight. Relinquishing the search for shortterm certainty is the other side of the developing tolerance ‘coin’. In the exchanges that occur during the scenario process, especially those as the scenarios are being developed and the insights and new understanding becomes apparent, it is the “the retrospective and the prospective truth-value of the spoken word, and the disciplined mental work that constitutes the analytic endeavour” (Taylor, 2010, p 406) that is central to the occurrence of negative capability in the participants. The past is connected to the present and the present is connected to the past to challenge assumptions and expectations to reveal the ‘propensity of the moment’ (Jullien, 1995; Jullien, 2004). Negative capability is fundamental to individuals coping with the implications of their thinking and contemplating how to safeguard the future of their organisation. The scenario process is about enabling participants to learn, unlearn, and transform their assumptions and reframe their view of the organisation, enabling them to plan future actions as the basis of organising. These actions can change over time; as actions are enacted they produce new unplanned experiences and outcomes. With a heightened sensitivity to their changing world their understanding deepens as well as further new discoveries are made. The processes of coping with uncertainty, generating the ‘unthought,’ is hidden from view within the scenario process (and related extensive scenario literature). The focus on generating strategic options and wind-tunnelling them has contributed to the seeming ease of application of the scenario process. However, until now, there is a lack of detailed empirical evidence on the experiences of participants as they happened during the scenario process. By conversing and reflecting on the outcomes, and staying open, they are able to cope with insights that challenges their assumptions and expectations. It is during these moments that their ‘negative capability’ is enacted.

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Chapter 6 Reflections in the Twilight This chapter reflects on many of the insights derived from conducting scenario projects. These insights have been developed from over thirty years of consulting projects with scenarios, researching the impact of scenarios in a wide variety of organisations and settings, and developing academic papers to sharpen understanding of scenario project experiences. Sharing the wealth of experiences with students and practitioners and receiving constructive feedback from them has helped sharpen understanding. By sharing these insights, the intention is to raise awareness of the dynamic experiences that occur during the scenario process, as well as highlight many of the challenges that may impact the outcome of the scenario process. As the saying goes: ‘forewarned is forearmed’.

Seeking Clarity on the Purpose of any Scenario Project Think Want X, However Insights are about Y In the detailed cases studies discussed in the book, the management team’s rationale for engaging with the scenario process was clear. For example, in the CBC case the management team wished to focus on escaping from the demands of key customers to lower prices and unpredictability in customer orders, and to counter these pressures with international expansion into new markets. International expansion would have two benefits. First, the expectation of less downward pressure on prices from new customers. Second, increased volumes would help with economies of scale, making production more efficient and helping CBC cope with downward demand pressure on prices. However, what transpired for the management team was a deeper understanding of the evolving control of the supply chain by key customers, i.e., the supermarkets, and the role that information technology was playing in enabling the supermarkets to gain control of their suppliers. Their initial proposed solution to the problem would only have accentuated the problem of the demand for lower prices, as, until export volumes reached a certain level, the supermarkets would continue to demand lower prices. For example, in the CLCS the case management team focused on their business becoming an agile organisation, able to respond to innovation in technology and software. They had little experience scanning the environment, with limited internal innovation capability, and considered scenario planning an approach to help them identify new opportunities at an early stage in the product life cycle. However, what transpired for the management team was a deeper understanding of the limitations of their business philosophy and modus operandi. Their philosophy and modus operandi were based around reactive problem-solving requests and relieving of problems https://doi.org/10.1515/9783110792065-006

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for their clients. The initial focal issue would not have revealed a redefinition of their business philosophy and modus operandi, as it would have blocked the opportunity to develop an ‘enabling’ approach. Their philosophy was deeply rooted, was taken for granted, and had never been challenged due to a combination of historical success and loyalty to JBA software and IBM AS/400 hardware. The scenario process produced ‘a-ha’ or ‘epiphany’ moments that resulted in reframing their business idea. For CBC they developed the idea of the ‘Customer Service Centre’ to help them gather information and data to manage operations and their customers; for CLCS they redefined their business to embrace an ‘enabling’ philosophy which overcame the limitations of their previous ‘relieving’ philosophy.

Capability to Frame/Reframe Two separate but interrelated issues limited the ability to reframe the business idea. First, the definition of the organisational boundary, what is for ‘us’ and what is not for ‘us’. The organisational boundary limits what a management team consider to be within the scope of their resources, capabilities, and control. It also restricts what other activities could be within the scope of the organisation. The CBC boundary was defined by their belief that ‘whisky is king’, and the interrelated stages of the distilling, blending, and bottling process defined the CBC boundary. The ‘whisky is king’ boundary constrained innovative and creative thinking about the future; innovative thinking was dominated by operations and operational efficiency. The CLCS boundary was defined by the nature of the consulting approach with clients: “They call, we solve”. A fast response to client requests, effective problem-solving, and nurturing of relationships defined the CLCS boundary. CLCS ensured that the client’s hardware and software problems were fixed to enable them to continue with their day-to-day business. Additionally, CLCS was wedded to IBM AS/400 machines and JBA software, which acted as a blockage to consider alternative hardware and software. For both the organisations they had a clearly defined boundary and, consequently, a myopic view of the world. Second is the nature of time. That is, the relationship between the past, the present, and the future, and how little time was spent looking back to understand what was occurring in the present. In both the CBC and CLCS case studies all concerns were current, with no connection to the past and how the past was influencing their (present) concerns. In both case studies the management teams were focused on reactive problem-solving to issues as they emerged. Yet, the past is not fixed; it can be continuously interpreted and reinterpreted, by bringing new understanding to known events, as well as identifying and linking previously unknown and unseen events to create new knowledge. Reactive problem-solving results in a lack of time invested in exploring time in the changing world.

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Constraints of boundaries and a focus on day-to-day problems and reactive problem-solving limit the ability to define and redefine the business/organisation on an ongoing basis in the constantly changing world.

Expect the Answer? Can’t See the Answer? Reject the Answer? Given the issues around boundary definition, and the view of time, a management team’s expectations from the scenario process are grounded in the present and current issues faced by their organisation. There is an expectation that the scenario project will address and answer those issues and concerns. To understand their issues and concerns in more detail, all members of the management team are interviewed one to one at the outset of the scenario project. The interviews are transcribed and analysed for themes, then the themes are merged anonymously and become the basis of feedback and discussion with the management team. The discussion has a two-part purpose. First, to share the views of the individual members of the management team with the collective team. In all of the case studies there was a wide range of views on shared experiences and concerns. It was the first time that the range of these views were shared in an open forum, helping the collective management team to ‘hear’ each other and understand the range of views. There is no narrowing or discounting of the views, as it is important that all members stay open to all issues and ideas. Second, once the interviews have been shared and discussed the management team agree on the focal areas for the scenario-building exercise. For example, the CBC interviews covered the following issues: (i) industry structure, (ii) demand and demand drivers including lifestyle effects and consumer attitudes, (iii) distribution structure worldwide, (iv) technical developments in production, (v) trends in presentation of products, and (vi) relative labour costs. There was no sense of the role of innovation in technology in supply chain management that was creating an ‘invisible’ mechanism of control by their key customers. The ‘answer’ to the issues and concerns identified in the interviews was not the answer that emerged from the insights from the scenario discussions. There was no sense of information and technological innovation that would create ‘information is king’ at the outset of the scenario project. For example, the CLCS interviews covered the following issues: (i) people and work patterns, (ii) Scottish constitutional status, (iii) internet cyberworlds – cyber terrorism and policy the internet, (iv) technology bubbles, (v) technological innovations, (vi) future of AS/400, (vii) the role and growth of SAP, (viii) consumer protection, and (ix) global macroeconomics. There was no sense of the role that technological innovation, the internet, and an ‘enabling’ approach to consulting would play in helping their customers’ business to grow.

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At the outset of the scenario process, it would not have been possible to understand the outcome of the journey that these two management teams would experience. The ‘answer’ was hidden from them, and it was through their exchanges and challenges, their reflections, and their development of new language that they were able to cultivate insights about their unfolding situation. The scenario process enabled these two management teams to ‘see’ what was hidden and consequently accept their insights. Patience and openness are required to remain open to new, unthought possibilities.

Bias, Knowledge Limitations, Simplistic Thinking, and Surprise All individuals have biases, limitations in knowledge, limitations in worldviews, and blind spots which restrict their ability to understand the changing world. Individuals develop job-specific knowledge that enables them to operate efficiently and effectively on a day-to-day basis; individuals deploy job-specific knowledge when confronted with operational issues or problems. This acts as a double-edged sword, as the continual use of this knowledge reinforces their problem-solving capability; it simultaneously limits their understanding of the unfolding world and limits the potential for foresight and, as a consequence, an organisation may experience unexpected shock or surprise. Many organisations experience shocks, surprises, and disruptions. Why? The lack of time and attention spent understanding the changing world. Many of the mechanisms to encourage and help develop an understanding of the changing environment are unsophisticated. Mechanisms such as PEST (Political, Economic, Societal, and Technological), STEEP (Societal, Technological, Economic, Ecological, and Political), and PESTLE (Political, Economic, Societal, Technological, Legal, and Ecological) are simplistic taxonomic categorising devices. They do not reveal linkages and connections within each category, and they do not reveal linkages, connections, and influences across the categories. They do not highlight change over time, as they are simple snapshots at a moment in time. Whilst simplistic in nature these categorising devices do not reveal the flows and connections between an organisation and its changing environment. This was highlighted in all four case studies presented in earlier chapters. Consequently, it is ever more likely that an organisation will experience shocks, surprises, and disruptions at some point in time.

Do it, Move on, New Distractions Emerge, Yet the Digestion/ Reflection Period Needed Many efforts at scenario planning projects, or strategy projects, as well as brainstorming events, produce little or no effective outcome. Without an effective outcome the

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management team will continue with their business-as-usual approach. The businessas-usual approach will likely result in a recurrence of prior problems and challenges, distractions, and new unforeseen problems. With no effective outcome the scenario or strategy project(s) and related work will be consigned to history. If the scenario project has not either provided immediate revelations and insights about the changing environment or connected the key concerns of the management team to the set of scenarios the scenario process will likely fail. What can be done to overcome such an outcome? A key requirement for any scenario project is to have a digestion period built into the overall process to enable the management team to reflect on the process as it unfolds, the set of scenarios, and the implications of the scenarios. The development of the scenarios emerges from a fully engaging process, requiring individual participation, concentration, openness, and willingness to suspend assumptions. At the outset of any scenario journey the outcome will not be clear; a disposition to stay open and not seek early ‘solutions’ or easy ‘answers’ will underpin a positive outcome. This is especially true for a management team engaging with the scenario process for the first time. Individuals have varying capabilities to understand and penetrate the set of scenarios to determine the implications for the organisation. For many individuals they often segregate and differentiate each scenario, which may result in the scenarios being considered on their own merit or judged as ‘good or bad’ or ‘best case or worse case’ which defeats the purpose of the scenario process and limits the ability to generate insights from the overall scenario process. A digestive period between workshops provides space for individual reflection and further management team debate and dialogue. It is important to provide such a space for individuals who may make new connections to past experiences or make connections to seemingly unrelated events that enable them to clarify their thinking and create moments of insight. From such digestion and reflections individuals can bring a ‘fresh’ eye to the set of scenarios. For example, CBC reflections on the set of scenarios enabled the management team to recognise the limitations in their sales order process, which was under consideration, and understand the implications of customers’ (e.g., supermarkets) historical investments in electronic point of sales (EPOS), which were previously considered as ‘gimmicks’ to retain consumers, in addition to customer investments in logistics and supply chain systems which were ‘hidden’. Logistics and supply chain systems were primarily considered internal supermarket distribution mechanisms. However, these historical investments were not previously considered relevant for CBC; however, they were fundamental to the emerging view that ‘information is king’. For example, CLCS reflections on the set of scenarios enabled the management team to understand the limitations of JBA software as it had no database capability at that time. The CLCS CEO visited the JBA head office, and it became apparent that JBA had not developed an integrated database capability into the software. Clients were also recruiting information and technology staff and that would reduce the need for

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problem-solving external consultancy. Other technological innovations would enhance the opportunities for business-to-business and business-to-customer interactions. These insights were fundamental for CLCS to have a mindset shift from providing the ‘total solution’ for clients to developing an ‘enabling approach’ to help support client growth.

Link to (Strategic or Policy) Action Unclear In the CBC and CLCS case studies that have featured in the book there were clear foresightful insights created by the management teams. These insights resulted in the reframing of the organisation. However, in the CP-IPC case study such an outcome did not emerge. For CP-IPC the scenario process outcome was both insightful and yet problematic for both the paper manufacturer and the publishing company. At the time of the project there was a degree of dissatisfaction in the relationship between them due to price volatility in the price of paper. If global paper prices were high the paper manufacturer would optimise production facilities to maximise paper output to drive revenue and profits. If global paper prices were high the publishing company would buy paper as and when required, utilising paper stocks for the various publications to keep costs under control. If global paper prices were low the paper manufacturer would optimise production facilities across the globe to gain lowest cost of production. If global paper prices were low the publishing company would buy paper for publications and to hold as stock to minimise future cost of producing products. Interestingly, both participating businesses thought that the other was responsible for the price fluctuations. The rationale for the scenario project is to provide a platform to share ideas on how to ‘smooth’ prices in the future. The recognised industry structure was based around a ‘pulp/paper/publishing’ perspective. During the scenario process the joint venture participants developed three scenarios – ‘The Godfathers’, ‘The Party of the Invaders’, and ‘New Constellations’. In all three scenarios information and technological innovations would have a major impact on both organisations. Information and technological innovations would change the level of demand for paper-based magazines and newspapers, potentially impacting overall global paper manufacturing capacity, with the industry already experiencing excess production capacity. Information and technological innovations would change the way individuals accessed and consumed information, whether it be news, sports information and statistics, leisure, or other areas of interest, from paper to digital. The move to digital would enable other media organisations to become the conduits of information. The process of change was highlighted in ‘The Party of the Invaders’ scenario, where new, innovative players would use their information and technological capabilities to reduce the need for traditional modes of accessing information or reading paper books and magazines. For the paper manufacturing company this would re-

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duce the demand for paper, especially its high-quality, lightweight paper for specialist publications. For the publishing company information and technological innovations would open up opportunities for new start-ups and existing (media) organisations to publish direct to consumers. ‘The Godfathers’ scenario was focused on how the paper manufacturers might restructure the global paper industry to protect their assets and ensure a future in a period of significant change. The ‘New Constellations’ scenario was focused on how both organisations would develop new relationships with organisations that neither had worked with previously. Information and technological innovations would drive change in these sectors. Crucially, the joint venture participants realised that the long and well-established ‘pulp/paper/publishing’ perspective would radically change in the future. The emerging new perspective was based around ‘content provider’/‘service’ or ‘distribution provider’/‘infrastructure provider’. The ‘content provider’ would own and publish original material and would use the services of the technological ‘service or distribution provider’ to disseminate original material. Both the ‘content provider’ and ‘service or distribution provider’ would use the underpinning ‘infrastructure providers’ technological architecture and platforms to disseminate original material. The demand for paperbased publications and news would likely reduce over time. Whilst the scenario project did not result in the reframing of the originating sponsor’s business idea, it provided the organisation with a significant time advantage, over its direct industry competitors, to undertake a strategic review of its operations and determine a way forward into the future. The originating sponsor is still the leading incumbent in the paper industry today.

Fragmentation and the Need to Develop Shared Language and Meaning The scenario project set out in chapter one involved multiple public sector organisations and private sector businesses to focus on the Scottish Government’s failed forestry, woodlands, and tree planting policy, which was impacting all the participating organisations. It became clear that words, language, and the meaning and understanding of the words and language were different across the participant organisations. Whilst hoping for the achievement of the government policy and goals the confusion arose from competing public sector and private sector goals, language, narratives, and actions which had never been discussed, negotiated, or resolved previously. Given the uncontested understanding of words and language, representatives of individual participating organisations perceived that all other organisations had a similar understanding of common and shared words. The scenario project was initiated by the Confederation of Forestry Industry (CONFOR). Public sector participating organisations included: Scottish Government, Scottish Environment Protection Agency (SEPA), Forestry Commission Scotland, For-

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estry Enterprise Scotland, Scottish Natural Heritage, Stirling Council, and Scottish Woodlands (covering woodlands and forestry as well as agriculture). Private sector participating businesses and supply chain organisations included: Egger, James Jones Sawmills, and Tilhill Forestry. In addition, industry bodies included National Farmers Union Scotland and Scottish Timber and Transport Forum. The context for the scenario project was based around the Scottish Government’s target of planting 10,000 hectares of new woodland per year, with a target to plant 100,000 hectares by 2022. However, by 2016 there was a shortfall of 6,000 hectares. This target was revised in 2016 to 12,000 hectares per annum, rising to 15,000 hectares to meet a new target of 33 million new trees planted by 2024/25. By not achieving these targets the Scottish Government would not meet one key element of its climate change targets, and the various public sector organisations would not meet weather and flooding resilience targets. There were concerns that the private sector would not be able to supply domestic timber to the construction industry, relying on (more expensive) imported timber which would have a detrimental impact on the UK Government’s balance of payments. The participants developed four scenarios: (i) ‘Sustainable integrated forest management’, (ii) ‘Clear conscience but lighter wallet’, (iii) ‘We didn’t see that coming!’, and (iv) ‘Where have all the trees gone?’ In three out of the four scenarios the woodlands and forestry policy and goals were not achieved. There were multiple causes of this outcome, including fragmentation across woodlands, forestry, and carbon policy resulting in missed opportunities; poor choice of tree plantings which resulted in new tree diseases; and increased importation of timber from other countries. Collectively the participants recognised, in the here-and-now, that policy would fail and that there was a detrimental knock-on effect on the sawmills and the timber supply chain. These insights indicated that the historical failure of forestry and woodlands policy would worsen over time due to the misaligned and competing goals, language, narratives, and actions would result in a downward spiral for all stakeholders. The participants realised collectively that their long-held assumption that policy targets would not be met because of the fragmentation in meaning and understanding of words and language. Without negotiated and shared understanding and language there would be misalignment between policy and business objectives. Collectively, it had dawned on participants that they were the “problem and the solution” and that engaging multiple stakeholder views in policymaking was vital to avoiding future failure. The negotiated consensus enabled them to recognise and understand the limitations of past assumptions, recognise, and acknowledge the limitations of meaning in common and shared words, and develop a new perspective to break through the existing situation. Otherwise, policy failure was predetermined, and all stakeholders would be culpable. The scenario process provided a safe space to negotiate and develop a shared understanding of words and language. An important non-trivial aspect of strategic conversations.

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Differences of Opinions and Fragmentation on the Way Forward Given uncertainty that surrounds every organisation there is always a range of views within and across a management team about what is/is not uncertain. In addition, not all managers share the same understanding of the significance of the uncertainties for the organisation. Fragmentation may exist, probably unknowingly, across a management team at the outset of a scenario project. Scenario projects should start with one-to-one interviews to explore and understand the individual views within a management about contextual uncertainty. On completion of the interviews and analysis of the interviews there is an opportunity to provide feedback to the collective management team. The collective management team are then able to understand the range of views, the areas of agreement, and the space to build consensus on the key uncertainties and challenges faced by their organisation. As the scenario process unfolds with the development of a set of scenarios it is possible that a new level of fragmentation will occur. The fragmentation is based around the expectation of the outcome of the scenario project. The two ends of the fragmentation of the outcome are: (i) a clear action plan or ‘blueprint’ to move forward and (ii) a recognition that actions are identified and that subsequently there will be a need to manage the emerging outcomes and be flexible and adaptive with future choices and actions. In the PRBV case study the scenario project was developed around operations and asset management, and technological innovation in the rail network system. A set of scenarios was developed; the four scenarios were: (i) ‘New Horizons’ where businesses and consumers are empowered via rail networks systems and technological change leads and is emergent over time; (ii) ‘Sense and Sensibility’ where businesses and consumers are empowered via rail networks systems and technological change is driven by patterns of use; (iii) ‘World of Two Speeds’ where the ICT determines what is possible and decides what is being done based on a clear ‘blueprint’; and (iv) ‘Familiar and Predictable’ where investment and technological innovation follows a historical pattern will limited innovation. Two of the scenarios – ‘World of Two Speeds’ and ‘Familiar and Predictable’ – were attractive to those managers who require certainty in decision-making. In the other two scenarios – ‘New Horizons’ and ‘Sense and Sensibility’ – other managers recognised that technological innovation was constantly evolving and that an incremental approach, without relying on a ‘blueprint’, would ensure that the organisation did not invest in technology that would rapidly go out of date. The incremental approach would seek to balance technological innovation and societal adaptability around technology and social media. Ironically both approaches were considered as minimising risk; however, the danger was that the ‘blueprint’ approach would require detailed and extensive planning and the possibility to lock the organisation into out-of-date technology before the

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first stages of implementation were in place. The incremental approach appealed to the government, which was funding the investment (of over €1bn) and was only willing to commit funds on an ongoing basis rather than fully commit funds at the outset. Overcoming fragmentation required openness between the participants to understand the complexity of the range of views being debated. Careful and thoughtful interaction and dialogue will help unravel the issues creating the fragmentation. However, ultimately a decision must be taken, and it is important that no one is excluded from the debate, regardless of their point of view and the final decision.

Time Passes and People Forget Insights from the Scenario Process In many scenario projects where the outcome is not immediately clear, where no reflective or digestion time has been agreed upon at the outset of the project, participants return to their desk and get caught up with that day’s problems and issues. As time passes these problems and issues dominate thinking and insights from the scenario project fade away. In another scenario project, with an organisation dedicated to achieving the goals of (i) equality for girls, (ii) supporting excluded and vulnerable children and young people, (iii) providing and supporting global and local advocacy, (iv) supporting and delivering humanitarian work, and (v) actions to strengthen the resilience of communities and increase our impact in fragile settings, the priorities for funding obscured these five goals. The participants identified 17 key uncertainties: (i) The nature of evolving definitions of groupings of people, (ii) The nature of (legitimate) collective stakeholder action, (iii) The ability of sector to adapt✶, (iv) The extent of conflict over scarce resources in developing countries, (v) The pace and scale of impact of climate change, (vi) The perception of ‘other’ and impact on ‘self’, (vii) The willingness and capacity of individuals as change makers, (viii) The extent of societal engagement with the democratic process, (ix) The sustainability of shared values for good of humanity, (x) The willingness and capability of world to innovate on old problems, (xi) Societal attitudes to gender equality, (xii) The ability of individual societies to embrace change, (xiii) The desire to build bridges and close caps between divides in developing countries, (xiv) The impact of global political power (shifts)✶, (xv) The role/nature/relevance of development aid, (xvi) The nature of organising and co-ordinating work in a technologically driven world, and (xvii) The extent of collaboration and co-operation between development stakeholders. The uncertainties noted with an ✶ were chosen to develop their scenarios. The participants developed four scenarios: (i) ‘Bold in a bad new world’ where the organisation would lead the sector to overcome fragmentation between nation states; (ii) ‘Crisis of confidence in a constrained world’ where fragmentation, insularity, and

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self-interest dominates across all stakeholders; (iii) ‘Tragedy of the sector’ where bureaucracy reduces the legitimacy of the sector; and (iv) ‘Catching the moment’ where funding is available but the sector is caught up in ongoing emergency projects. Insights across all four scenarios highlighted that, for differing reasons, with or without funding the organisation would become less effective in the future. There were numerous new and emerging challenges around funding and the management team recognised the potential for fragmentation between them. There was an agreedupon need to develop (i) a clear basis of differentiation within the sector, (ii) a focus on outputs with increased evaluation to overcome the perception of ineffectiveness, (iii) the development of specific country-by-country policies and actions, rather than generic policies, to be considered relevant, and (iv) the need to become a more agile organisation influencing local, national, and international debates and narratives. Otherwise, the organisation would be perceived as unsuccessful and increasingly become irrelevant. The organisation faced a dilemma – continue to act in the familiar manner as it had in the past, or become bold and endeavour to become a leader for the sector. The latter would be more challenging. However, in the short term, the attention and priority moved back towards an internal focus, at the expense of advancing and advocating children’s rights and equality for girls. There was a realisation that many institutions in the sector were losing the trust of those that they claimed to represent. The management team agreed that they needed a voice that was heard, respected, and valued and that it was authentic. Legitimacy was and would be earned and determined by others, not self-declared. Legitimacy would come from a clear identity and trust from living the organisation’s values. The management team agreed that grappling with legitimacy, transparency, agility, and adaptability was the focus into the future, and the understanding of what these objectives would mean would also change over time. However, the focus on the internal ‘business model’ was at the detriment of the focus on the five goals noted earlier. As time passed the focus on the five goals and sector leadership waned and ebbed further away.

Do it for the Client/do it with the Client/Let the Client do it Themselves – Scenario Process Ownership and Engagement There should be clear boundaries between the ‘client’ and the facilitator of the scenario process. The ‘client’ undertaking a scenario project for the first time is unlikely to understand the ‘journey’ that they will experience. The ‘journey’ may be uncomfortable for the participants. Equally, the journey may be an exciting and intriguing prospect for them. No matter the state of mind of the ‘client’ and the participants it is essential that the scenario facilitator remain neutral about the focus and direction of the process as

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it unfolds, objective and independent of the participants, and impartial and nonaligned with the outcome. The ‘client’ owns the scenario project, the outcome, and subsequent actions. When the scenario project is finished it is the ‘client’ that owns and implements the outcomes and actions. Not the facilitator. It may be tempting for the facilitator to intervene in the ongoing and unfolding process; however, this will likely result in the ‘client’ failing to own the process and outcomes. The facilitator can legitimately ask questions around (i) clarification of ideas raised by participants to ensure all participants have the same understanding, (ii) clarification of emerging issues, again to ensure all participants have the same understanding, (iii) questions to stimulate deeper explanations of key points and issues of concern, and (iv) the significance of emerging insights from the process, again to ensure all participants have the same understanding. ‘Clients’ will likely have questions during the process as it unfolds. This occurs regularly during scenario projects. It is the nature of the unpredictability of the ‘journey’ that participants will experience. No two scenario projects and processes are the same. It is important that the scenario facilitator addresses such questions at the relevant stage of the ‘journey’. The ‘journey’ would have been explained to the ‘client’ prior to agreeing to undertake the scenario project. However, the reality of experiencing and living through the various stages of the process affects different people in different ways. It is important that the facilitator reassures and reminds the ‘client’ of the ‘journey’ to date, as well as explaining the next stage(s) of the ‘journey’. From time to time the facilitator may have to summarise the ongoing outputs of the process to help participants make sense of their ‘journey’. It is important that again the facilitator remains impartial and non-aligned with these outputs and ensures that the ‘client’ understands and confirms the outputs. The scenario facilitator ‘owns’ the scenario process, whilst the ‘client’ ‘owns’ the inputs into the scenario process, the outputs from the engagement and debates that occur during the scenario process, and the ultimate outcomes from the scenario process. The scenario facilitator will have responsibility for summarising the totality of the scenario process in the final report to the ‘client’.

Design of the Scenario Process The scenario process has six key events that will unfold over the duration of the scenario project. A typical scenario project and the steps are set out in the figure below. Whilst there are six events that are central to the process, within the recommended timescale, the timescales have flexibility to reflect the demands, requirements, and time constraints of the ‘client’. The scenario project timeframe is expected to be approximately ten elapsed weeks. Prior to the commencement of a scenario project, it is likely that initial conversations will be held with the ‘client’ management team to explain the overall process,

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Figure 32: Typical timescale and stages of scenario project.

the individual stages, and timescales of the process, as well as the expected outcomes from the scenario process. Doing so will help the ‘client’ reflect and consider the overall process and determine if they wish to proceed with the scenario project. It will also provide the scenario facilitator with an opportunity to learn more about the ‘client’ organisation, its situation or context, and the potential reasons for the ‘client’ wishing to undertake the scenario project. There may well be several such pre-meetings as the ‘client’ reflects on the discussions and shares understanding internally with other colleagues. This provides a platform for consensus to be developed within the ‘client’ management team. If the project gains positive reception it is likely that the scenario facilitator will be invited to make a presentation to the wider senior management of the ‘client’ organisation. Once agreement has been given to undertake the scenario project the next step is to agree on a time to interview each of the scenario project participants, one by one and face to face. It is important that everyone individually has time and space to address the traditional set of seven scenario questions (please refer to van der Heijden, Bradfield, Burt, Cairns and Wright, 2002 for these questions). In addition to the set of seven scenario questions, additional questions about (i) the nature of the organisation’s value proposition (whether public or private), (ii) the basis of differentiation of the organisation, and (iii) what, if anything, is unique about the organisation. The responses and details to these three questions will help the facilitator prepare a ‘draft’ business idea of the organisation which can be presented, discussed, and refined in workshop 1. Workshop 1 is usually a one-day event. It will most likely be split into two sessions. The first session will focus on the anonymised interviews, categorised by theme, with verbatim statements included as an explanatory mechanism for each theme. This is a lively session as the range of views across a management team can be surprising for them. Understanding the range of views is important as it is likely that the management

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team have discussed openly their hopes and fears and shared their views on what, if anything, makes the organisation successful. It also provides an opportunity for the scenario facilitator to confirm that he/she has heard and understood the comments that arose during the interviews. The scenario facilitator will then work with the management team to set out their ‘scenario agenda’. The scenario agenda will emerge from the interview feedback as the management team discuss and agree on the areas of concern identified from the interviews and these will be the basis of the second workshop – scenario building. The second session of workshop 1 is the development of the ‘client’s’ business idea. As set out in chapter 3 the business idea is an integrated model that connects all aspects of the organisation, whether public or private. The business idea is a holistic and ‘helicopter’ view of the organisation. Whilst the management team may implicitly know all elements, or some of the elements, they may not have a clear view of how all the elements and how they are linked and integrated to explain the basis of success or rationale for the delivery of public goods. The time between workshop 1 and workshop 2 is required to find a ‘Remarkable Person(s)’ to join the scenario-building workshop. The ‘Remarkable Person’ is an outsider and can appreciate the situation facing the ‘client’. Someone who will bring new and fresh perspectives to the situation that will challenge constructively the ‘client’ and is able to participate in the scenario-building exercises. Ownership of the scenarios is with the ‘client’. There is then a short ‘incubation’ period, to enable the ‘client’ to reflect and consider the insights from the set of scenarios. Workshop 3 focuses on a deeper understanding of the implications of the scenarios for the ‘client’. It is an open space for exchanges about insights, about possible responses, and about emerging priorities. From workshop 1 to workshop 3 the members of the management team will likely trigger their untapped ‘negative capability’ as they begin to understand the insights and implications of the set of scenarios. As the outcome of the scenario process cannot be known at the outset the participants are likely to experience some level of anxiety and/or excitement about the insights that they generate. Workshop 3 provides an opportunity to explore what actions are needed to capture insights from the set of scenarios. Consideration will be given to the sustainability of the business idea – can and how can it be reframed as the basis of organising in the future? The final stage of the scenario process is workshop 4 which is designed to summarise the total process, from initial interviews through to the set of scenarios and insights from the scenarios. A short report will be developed, capturing all aspects of the ‘clients’ experience during the scenario process. Follow-up interviews can be designed into the process. However, it is important to recognise that from the end of workshop 2 to the end of the scenario process, the scenario process acts as a ‘container’ (Simpson and French, 2006) for anxieties that should help curtail any premature closure. In such circumstances an openness disposition requires an ability to hold multiple, possibly conflicting,

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ideas open until the moment of clarity emerges. When the moment of clarity emerges, it is likely to inform the way forward.

Awareness of Challenges for Scenario Planning Projects There are several challenges that can have an impact on the scenario process and affect the outcome. First, the level of day-to-day problem-solving involving the management team and the consequences of short-term fixes. Day-to-day problem-solving is usually a sign of ‘fire-fighting’ by the management team as they lurch from one issue or crisis to another. Day-to-day problem-solving indicates that the management team have not identified the source of the problem, which continues to reoccur over time. Day-to-day problem-solving will likely take attention away from the scenario process, as the urgent drives out the important, especially as the ‘client’ will not yet have insights from the scenario process. Yet, as the case studies discussed in chapter 4 thoughtful consideration of the process insights and their implications for the business idea can have a profound effect on the ‘client’, overcoming the distractions of the day-to-day. Second, and linked to the first challenge, are the organisational rules, conventions, and taken-for-granted assumptions that limit managers’ ability to ‘think out of the box’. Over time individuals build up ‘recipes’ (Spender, 1989) about their experiences within an organisation, with these recipes spanning internal aspects of the organisation as well as positioning within its wider context. The more the organisation is untroubled by external disturbances, the more the organisation continues to be successful and the more the recipes are reinforced. These (reinforced) recipes act as a boundary; they act as a constraint on imagination and creativity, thus reducing the search or scanning capability of individuals, eventually making the organisation susceptible to shocks and surprises. Third, in considering the composition and preferences of the ‘client’, is the question, is their view of the world ‘myopic’ (Levinthal and March, 1993) or do they demonstrate a ‘hyperopic’ view of the world (Burt, Mackay and Perchard, 2015; Mackay and Burt, 2015)? Myopia can take three forms, namely “the tendency to overlook distant times, distant places, and failures” (Levinthal and March, 1993, p 95), which are a blockage to learning. The tendency to overlook distant times is favouring the short term over developing a vision for the future. A vision for the future includes an interpretation and reinterpretation of the past and present in the present. The tendency to overlook distant places is to only consider the immediate context and ignore weak signals from places that do not seem to be relevant to the organisation. With the tendency to overlook past failures without the underlying causes, the organisation will likely lurch from one failure to another, with failures continuing to reoccur over time. These three forms of myopia again act as a constraint on imagination and crea-

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tivity, thus reducing the search or scanning capability of individuals, eventually making the organisation susceptible to shocks and surprises.

Group Composition and Culture of Openness/Questioning and the Management of the Strategic Conversation The make-up of the group or management team that will be the ‘client’ throughout the scenario process is important as it is likely to affect the scenario process and affect its potential to support the participants. Although scenario facilitators cannot pick and choose individuals to make up the ‘client’ team, there are characteristics that are likely to bring about a positive outcome from the process. The ‘client’ management team are likely to represent all aspects and functions of the organisation. Doing so is important to ensure diversity of issues and ideas throughout the duration of the scenario process. Diversity ensures that the focal areas or scenario agenda will be explored widely, beyond existing organisational ‘recipe’ boundaries. Diversity of participants will help introduce contrary and differing ideas and points of view which will help to stretch participant thinking and creativity during the process. This is important as the scenario process is likely to help participants see the familiar in new ways or see and understand the unseen for the first time. Developing such insights is key to helping the participants in reframing their understanding of the organisation. It is also important as no one individual will have ‘the answer’. The changing world is too complex for one individual to understand; the diversity of participants is required to help to move thinking beyond business-as-usual. Within the ‘client’ management team it is important to agree that hierarchy does not influence the process. Openness and willingness to hear and listen to a wide range of views is important. Issues that emerge during the scenario process may be uncomfortable for the management team. It should be agreed beforehand that the management team leave hierarchy outside of the environment where the scenario process will be undertaken. Openness and willingness to hear and listen to a wide range of views is important; however, language can be problematic. Scenarios as strategic conversation is widely recognised as a key aspect of the scenario process. However, with language there is the problem of assuming coherence of meaning across individuals. Words can have different interpretations and are dependent on the experiences and backgrounds of individuals. In everyday organisational life, individuals do not stop and ask: “What do you think this word or phrase means?” There are certain taken-forgranted words within any organisation and certain common or everyday words where meaning is again taken-for-granted. Everyday words are imposed onto situations to try to make sense of the situation or experience. Taken-for-granted words are understood as ‘regimes of signification’ (Chia, 1997).

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Regimes of signification are defined as a “set of conventionally established textual codes governing the organization and presentation of ideas, information, observations and conjectures in such a way as to render them acceptable” (Chia, 1997, p 73). Regimes of signification use pre-established language to bring order into a situation. However, Wittgenstein (1922) notes that “the limits of my language mean the limits of my world” (p. 74). The scenario process, especially scenarios such as strategic conversation, is about overcoming the limitations of language. The scenario process is about generating novel insights about the situation under consideration, which requires creativity and novel language to understand situations anew. Generating novel insights occurs as participants develop a set of scenarios, with the essence of each scenario captured and represented by its title. Titles should be thought-provoking, expressing the fundamental nature of a potential future. However, foresight with scenarios occurs through language where the understanding of the past is interpreted and reinterpreted, and accordingly, the present is also reinterpreted to generate novel insights and understanding in the here-and-now. The process of interpreting and reinterpreting words and language is understood as ‘semantic transformation’ (Bosma, Chia and Fouweather, 2016). “Semantic transformation involves a dialogical process in which fresh semantic spaces are creatively opened up, whereby new terms are coined, and old ones broken up, combined, and/or redeployed in novel ways, in an effort to express the fresh circumstances experienced or new phenomena observed” (Bosma, Chia and Fouweather, 2016, p 17). The scenario process and scenarios as strategic conversation is therefore now understood as “language games” (Lyotard, 1984, p 10). Recognising that the ‘language game’ (Lyotard, 1984) involves challenging preconceived notions and meaning of words, using words beyond their everyday meaning to bring about novel understanding about the area of concern, and thus bringing fresh insights into the situation faced by the organisation. Scenarios as strategic conversation are therefore about ‘semantic transformation’ (Bosma, Chia and Fouweather, 2016). How the facilitator encourages the participants to understand ‘language games’ and how the participants engage with challenging the meaning of words and finding novel ways to express their situation is central to strategic conversation with the scenario process.

The Skills Required to be Demonstrated and Employed by the Facilitator As discussed above, the facilitator must be neutral throughout the scenario project, leading on the steps and stages of the process and explaining the process journey for the client and that there may be bumps and confusion during the journey. The facilitator should clarify issues about any aspect of the scenario process. The facilitator should ensure there is a link to the initial agenda (even if it subsequently becomes

References

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redundant). Whilst the facilitator must be neutral, the facilitator cannot be subservient to the management team. The facilitator must continuously nurture an inquiring mind within all participants. The facilitator can question participants for clarity or for expansion on points that the ‘client’ deems important. Expansion on points could be captured and represented as diagrams helping to build a memory of that exchange of views. Such diagrams could also be incorporated into any scenario story. As far as possible, the facilitator should capture comments, observations, and insights using participant words. The facilitator should summarise and conceptualise insights from the management team. However, the facilitator should be ‘invisible’ during the process to ensure decision power rests with the management team. Neither the facilitator nor a member of the management team should avoid falling into the trap of ‘promoting’ ideas. Often individuals have a ‘bug bear’ about an issue and may try to impose it onto the participants. The facilitator needs to be aware of such a possibility.

References Bosma, B., Chia, R., Fouweather, I. (2016) Radical learning through semantic transformation: Capitalizing on novelty, Management Learning, 47 (1), 14–27 Burt, G., Mackay, D. J., Perchard, A. (2105) Managerial hyperopia: A potential unintended consequence of foresight in a top management team? Technological Forecasting and Social Change, 101, 134–146 Chia, R. (1997) Process Philosophy and Management Learning: Cultivating ‘Foresight’ in Management Education, in Management Learning: Integrating Perspectives in Theory and Practice, Burgoyne J and Reynolds M (eds), Sage Publications Ltd, pp 71–88. Simpson, P., French, R. (2006) Negative capability and the capacity to think in the present moment: Some implications for leadership practice, Leadership, 2 (2), 245–255 van der Heijden, K., Bradfield, R., Burt, G., Cairns, G., and Wright, G. (2002) The Sixth Sense: Accelerating Organizational Learning with Scenarios, John Wiley & Sons, Chichester Levinthal, D. A., March, J. A. (1993) The myopia of learning, Strategic Management Journal, 14 (S2), 95–112 Lyotard, J. (1984) The Postmodern Condition: A Report on Knowledge, University of Minnesota Press, Minneapolis, MN Mackay, D., Burt, G. (2015) Strategic learning, foresight and hyperopia, Management Learning, 46, (5), 546–564 Spender, J-C. (1989) Industry recipes: An enquiry into the nature and sources of managerial judgement, Oxford, Basil Blackwell Wittgenstein, L. (1922) Tractatus Logico-Philosophicus, Kegan Paul, Trench, Trubner & Co., Ltd., London

Chapter 7 Conclusion – How to Employ the Scenario Process In this conclusion chapter I will explain and expand on Figure 32 which is included in chapter 6. I will set out the phases involved in the scenario process, providing many examples from practice, to help guide ‘facilitators’ as they apply the scenario process in their organisation. Figure 33 was developed to help any organisation to engage with the scenario process, whether they were experienced in using scenarios or not, in an effective and efficient manner. The previous chapters are intended to explore the evolution of the scenario process in a rigorous manner and provide a novel contemporary approach to applying the scenario process in practice and understanding its potential to bring about change. The outcome should be a better understanding of the past and present in the here-and-now – foresight. There is no requirement to have extensive resources or expertise in the scenario process. The main requirements are simple, including: (i) a time commitment to the process, (ii) a desire to stick with the process when the outcome may not be evident, (iii) an openness disposition to inquiry and being willing to have deeply held assumptions challenged, and (iv) trust in the scenario process and the journey it takes you on. The typical scenario project timeline is reproduced here, and each of the eight phases, related steps, and approximate elapsed time periods are now discussed in detail. Prior to the commencement of any scenario project there is likely to be a ‘felt’ need by one or more members of the management team that something is amiss with the organisation’s strategy. Performance may not be meeting the management team’s expectations, competitors may be challenging and changing the established rules of the game, innovators may be disrupting the landscape, customer and/or consumer expectations may be changing without clarity about the reasons for such changes, or the impact of technological innovations and changes may be unclear. Actions may have been taken to address such concerns, yet, problems persist, possibly worsening over time. The management team may have read about the scenario process, experienced it as part of their academic or management development studies, or discussed it with contemporaries in other organisations who have had the experience of using the scenario process. No matter the reason many management teams are curious to understand if they could benefit from undertaking a scenario project. In one recent project, after initial exploratory meetings with several members of the management team, they requested a meeting to enable all members of the management team to learn about the scenario process and ask any questions to help improve their understanding. At the end of the presentation and question and answer session, the management team requested a short break for their deliberations. When we reconvened, the CEO stated:

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The presentation was excellent, helpful, but we did not really understand it. We would like to continue to engage with the scenario process as we see it as an ideal approach for a teambuilding exercise and that we are not experienced in looking outside the organisation.

Not the ideal or expected response; however, it started a journey that the organisation benefited from hugely as well as provided some of the early foundations for research that underpin this book. The eight phases, and related steps, are now discussed in more detail including exemplar evidence from a wide range of scenario projects.

Figure 33: Typical timescale and stages of scenario project. ✶ Figure 33 was initially developed by a team of academics at Strathclyde Business School (including myself) and has been adapted by me to include new research-led insights.

Phase 1 – Management Team Initial Interviews The first phase in every scenario project should be one-to-one and face-to-face interviews with all members of the management team who will participate in the scenario project. These interviews are wide ranging, exploring internal issues and issues related to the external landscape that the organisation occupies and experiences, across past, present, and future time horizons. The interview should be scheduled for 45 minutes; it may last longer if the interviewee is happy to explore their issues and concerns in detail. The intention is to have a wide-ranging conversation, with the interviewee setting the agenda throughout the interview. The interviewer may intervene during the interview to probe emerging issues in more depth. The interviewer should periodically summarise the content of the interview to ensure that there was an understanding of the issues between the interviewer and interviewee. There should be consistency of approach across the interviews with each member of the management team. These trigger questions for the scenario interviews were initially established as a ‘common interview plan’ to make interviews consistent across everyone being inter-

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viewed (Amara and Lipinsky, 1983). Amara and Lipinsky (p 50) set out five questions as part of the common interview plan, and these questions were asked in the agreed time horizon: 1. Interrogation of the clairvoyant – the clairvoyant is all knowing and able to answer any question about the world in the agreed time horizon; what questions would you ask and why? 2. Report on an unfavourable future – within the time horizon the future is bleak; how bleak is bleak, and how would it be reported in the media? 3. Report of a favourable future – within the time horizon the future is favourable; how favourable is favourable, and how would this be reported in the media? 4. Identification of pivotal decisions – within the time horizon identify one or two pivotal decisions to be taken and how they will impact the future 5. Identification of current managerial assumptions – if a knowledgeable forecaster predicted thoughts about the future would the forecasts be different from the management team? Over time these questions have been refined and there is now wide agreement on the questions to be asked, understood as the ‘Seven Questions’ (van der Heijden, 1996; 2005; van der Heijden, Bradfield, Burt, Cairns, and Wright, 2002). The seven questions are: 1. If you met a clairvoyant, what three questions about the organisation and its future would you ask? 2. From the three questions that you asked the clairvoyant, if all turned out well then please describe the ‘optimistic or upside future’. Describe the ‘optimistic’ future in detail. 3. From the three questions that you asked the clairvoyant, if it did not turn out well then please describe the ‘undesirable or downside’ future. Describe the ‘undesirable’ future in detail. 4. Looking back, what lessons from the past would you take forward into the future? 5. What big decisions lie ahead for the organisation, and why are these decisions important? 6. What, if any, constraints are the organisation experiencing as it moves into the future? 7. How would you like to be remembered in the future? The purpose of the first three questions is to map out the range of possibilities that individuals expect to occur within the agreed time horizon. The range of possibilities will be revisited and help in workshop 1 when the management team/participants agree on their scenario agenda. The range of possibilities may be revisited in workshop 2 once the set of scenarios have been developed to determine the extent of stretch in their thinking. The next three questions are about the internal issues that may or not impact the insights arising from the set of scenarios. The final question is

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about identifying the level of ambition(s) and potential contribution to achieve the ambition(s) of each member of the management team. In addition to these seven questions, three new questions have been developed to explore the organisation’s business idea (for a commercial organisation or licence to deliver public goods for a public/non-profit organisation): 1. What is the value that the organisation provides for its customers? [Value could be derived from tangible or intangible elements or a combination of both] 2. What is it that makes the organisation unique, if anything? [Uniqueness-derived internal resources] 3. What is it that differentiates the organisation from other competing organisations? [Competitive advantage and standing out in a competitive environment] The business idea is developed in workshop 1 and it provides an opportunity for the management team to discuss, explore, negotiate, and agree on the fundamental elements of their organisation. The business idea provides a holistic understanding of the organisation and reveals how processes, functions, and activities are integrated. The business idea is revisited in workshop 3 as the management team reflect on the insights from the set of scenarios and begin to determine the basis of organising in the future.

Phase 2 – Workshop 1 Including Feedback and Confirmation of Interview Themes, Agreeing on the Scenario Agenda, and Development of the Initial Business Idea On the completion of all individual interviews, the scenario facilitator will transcribe each interview verbatim. Only minor adjustments, for clarification, should be made to any statements that arose during the interviews. The scenario facilitator should then analyse all the interviews identifying themes in each interview. The themes across all interviews are noted and then compared, and from this step the potential overall organising themes are developed. The overall organising themes are developed with key themes and related sub-themes. Each interview is then to be revisited and statements from individual interviews will be transferred and merged under the overall organising framework. Statements from individuals must be anonymised. Once all the interview statements are captured in the organising framework the scenario facilitator can begin to develop the interview report to be presented to the management team. The interview themes are then summarised and prepared to be presented in workshop 1. Workshop 1 will be the first opportunity for the management team to hear the full range of views. Experience of providing interview feedback is insightful as it is likely to be the first time the management team encounter the range of views of their colleagues. The range of views

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will stimulate conversations across the management team as they absorb the views of their colleagues. By presenting some interview data from one of the cases discussed in earlier chapters, it is possible to observe the range of views, tensions, and contradictions across and between the management team. Until such views are heard and settled the likelihood of a unified management team approach to gaining insights from the scenario process is reduced. The scenario process is about providing time and space to socially negotiate issues and differences between the management team (Eden, 1992). In the short extract provided below the main theme and sub-themes were: – Our people – Participative management – Quality – Development – Supervisory requirements – Labour relations – Shift working – Location – Pay Comments across this theme in one of the sub-sections included: – “We always treat people well, but we do not involve them.” – “We are keen on employee involvement. It is a trend of the times, but we also believe in it intrinsically.” – “Over the last five years we have made major progress in getting people involved. It is heartening to see people stand up and talk about their job.” – “Our aim is to make people think, contribute and take responsibility.” – “There is a potential threat in the area of labour relations. Most of our people think ‘demarcation’, and we ask them to break through that.” – “Our most important development is to take people involvement further. We have to break down barriers.” – “We have a good workforce. People realise that we are a good company to work for.” – “Our current position is that we have the right equipment, but not the right calibre of people.” The management team in the case study were surprised to hear and read the range of views on ‘Our people’. They realised that no matter the outcome of the scenario process there would need to be a significant improvement in the development of people. However, these and other issues are often sensitive, and the scenario facilitator needs to be aware of the impact of the potential range of views held by the management team on any issue. Time and space should be provided for the management team to discuss any issue where there is a range of views. By providing time and space the

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management team can build consensus during the scenario process on any issue where there are differences between them. The next activity in workshop 1 is the development of the scenario agenda. Having heard the interviews and the issues raised, the management team are able to focus on the opportunities and challenges that they deem important. A round of idea generation about the opportunities and challenges is undertaken and the outcome of this activity will provide the foundation for the scenario agenda. This aspect of the scenario process is another example of strategic conversation in action where the management team socially negotiate and agree on the focal areas for workshop 2.

Phase 3 – RP Search and Background Research A key phase in preparation for the scenario workshop is the search for external ‘remarkable people’ to participate in the strategic conversation in workshop 2. ‘Remarkable people’ are unconventional thinkers “who have their fingers on the pulse of change” (Schwartz, 1991, p 80). The role of the ‘remarkable people’ was an innovation initiated by Shell and as noted by Schwartz (1991) “Pierre Wack knew that to see the future he had to go out and talk with remarkable people. Unconventional people often are found in unconventional locations and roles” (p 80). ‘Remarkable people’ provide unorthodox views of the situation. ‘Remarkable people’ are unlikely to be within the industry of concern, or be potentially even unaware of the industry. They bring insights and ideas from other domains and can relate them to the ‘client’ and the client’s situation. They can challenge the taken-for-granted conventional assumptions within the ‘client’ organisation. Van der Heijden, Bradfield, Burt, Cairns, and Wright, (2002) note that “the concept of remarkable people, institutionalised in the Shell scenario process, is founded on the principle that the search for innovative thinking needs to take place from outside the organisation. This is achieved by identifying individuals who are not part of the normal strategic conversation that occurs within the organisation, but whose knowledge overlaps areas where the client’s knowledge is fragmented and unstructured. Remarkable people can trigger the ‘client’s scenario team to surface intuitive knowledge and then integrate it into the scenario process and generate new insights” (p 168). Invited remarkable people are provided with an opportunity to make a presentation to the management team. Prior to the workshop they are provided with a copy of the interview report and business idea, to enable them to gain a deeper understanding about the ‘client’ organisation. They are given an opportunity in workshop 2 to give their presentation, which will introduce new ideas, new concepts, new language, and new ways of understanding the situation faced by the ‘client’ organisation. The management team are provided with time to ask questions for clarification or expansion of the ideas presented by the remarkable people. The management team can introduce these new ideas into the scenario process if and where they are relevant.

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Phase 4 – Workshop 2 Including Scenario Development and Initial Insights Workshop 2 is normally scheduled as a two-day workshop. Two days provide opportunities for any additional research to be introduced, as well as inputs from the ‘remarkable people’, as part of stretching the thinking of the management team. Workshop 2 has ten steps. Step 1 is a round of initial idea generation by the management team on the uncertainties inherent in the scenario agenda. Step 2 is a similar activity followed in step 1; however, the idea generation here happens after the remarkable people have made their presentations, with the management team adding new ideas stimulated by the content and ideas in the presentation. As part of steps 1 and 2 the management team write-up their uncertainties on Post-it notes. These Post-it notes could be captured on yellow Post-it notes. At the same time the members of the management team create two outcomes for each uncertainty, noting how they think the uncertainty may resolve in the future. These Post-it notes could be captured on pale blue Post-it notes to differentiate them from the original uncertainties. There are a few rules of thumb that help guide participants as they make explicit and note their uncertainties. First, there should be one idea per Post-it. The words should be clear and written as an unambiguous statement. The words should not be written as questions. It is also helpful that the words are written in BLOCK CAPITALS (no joined-up handwriting) as it is easier for all participants to read the Post-it notes. When writing on the Post-it note it is recommended to make use of the full surface of the Post-it note (rather than squeeze the words into the postage stamp corner). Second, when writing the words on the surface of the Post-it note it is useful to pay heed to ‘Miller’s law’ – Miller (1956) stated that individuals could remember 7 +/- 2 ideas at any one time. So, no fewer than five words and no more than nine words on the Post-it note. Third, words to express uncertainties include: (i) ‘The rate of . . . .’, (ii) ‘The nature of . . . .’, (iii) ‘The extent of . . . .’, (iv) ‘The attitude to . . . .’, (v) ‘The level of . . . .’, (vi) ‘The capacity of . . . .’, and (vii) ‘The relationship between . . . .’. It is also helpful to avoid value-laden statements whenever possible, for example, ‘good or bad’ or ‘desirable or undesirable’. Figure 34 provides an example of an uncertainty Post-it note. Fourth, the uncertainty Post-it notes should be numbered, for example, 1, 2, 3, etc., and the outcome uncertainties should be numbered, for example, 1A and 1B, 2A and 2B, 3A and 3B, etc., to enable traceability so that the originator of the idea is able to clarify their ideas if there is any confusion around the meaning of the idea at any stage of the scenario building process. As part of setting up the space in readiness for the scenario-building process one wall should have a number of flipcharts set up so that the uncertainty Post-it notes can be gathered and made visible to all participants. Once the management team have exhausted writing up their uncertainty Post-it notes and their outcome Post-it notes they are invited to place them on the flipcharts. In doing so it is important that the uncertainty

Phase 4 – Workshop 2 Including Scenario Development and Initial Insights

Figure 34: Cluster example.

Figure 35: Cluster example.

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Post-it notes are placed randomly around the perimeter of the flipcharts. Figures 34 and 35 are examples of the uncertainty Post-it notes on the flipcharts. Similarly, the outcome Post-it notes can be placed on flipcharts situated on another wall/space. These do not need to be placed on the perimeter of the flipcharts and will be used in the scenariobuilding process later in workshop 2. The management team are then invited to step up and review all the uncertainty Post-it notes. Questions about meaning may be asked for clarification. There should be no direct challenge, as every idea has legitimacy, and in the early stage of the scenario process no one individual will know how these ideas will play out during the process. If an individual has been inspired by the range of ideas and wishes to add further new ideas then they should be encouraged, with the Post-it notes added to the original set of uncertainty ideas. The protocol for numbering Post-it notes should be adhered to. Prior to clustering Post-it notes, all Post-it notes should be placed on the working space where clustering will occur. Figure 36 is the set-up of all participant Post-it notes prior to grouping or clustering.

Figure 36: Post-it notes before clustering.

Step 3 is about grouping or clustering ideas into higher-level understanding of the uncertainties. This is a challenging aspect of the scenario process. It requires individuals to make connections with seemingly unconnected uncertainties. It is important that they are given time and space to be creative and articulate and share the logic of the grouping. It is important to avoid word association when grouping (for example – water treatment, water shortages, and water pollution). It is important to avoid top-down grouping

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(for example – politics as the key factor that is imposed on uncertainties to make connections and all Post-it notes with either ‘politics’ or words related to ‘politics’ combined together to form a group). The world does not come in neat and tidy packages; the dynamic interacting of issues would not be captured if the top-down grouping approach was applied by participants. Step 4 is about articulating the logic of the relationships or connections with a cluster or group. A rule of thumb is to test the logic of the cluster(s) by seeking to articulate and explain the reasoning and linkages behind the connections. Articulating the reasoning ensures that all participants have the same understanding of the cluster. Once the logic of the cluster is clear and understood, the individual making the cluster should name the cluster, stating the fundamental higher-level understanding of the grouping of the uncertainties is within the cluster. Figures 34 and 35 are examples of clustering, with the over-arching label expressing the higher-level understanding of the uncertainties. Step 5 is about prioritising the clusters or groups based on impact and predictability of the outcome of the uncertainty. Traditionally the 2 × 2 impact/predictability matrix is the basis of helping the management team discuss and negotiate the impact and predictability of their uncertainties. Whilst this has come under scrutiny recently as to whether the selected uncertainties are continuums or independent possibilities (Ramirez and Wilkinson, 2014), with Wack (1984) noting its limitations and preferring detailed analysis and branching points to differentiate uncertainties from predetermined elements, with the recognition of managerial time constraints the 2 × 2 impact/predictability matrix is widely used in practice. Once the key uncertainties are ranked to determine the high impact (for the organisation) and the least predictable outcome the management team can discuss and select the two uncertainties to develop scenarios. There is an element of art involved in this step as the management team explore the possible combinations to eventually agree on the uncertainties to develop the scenarios. If it holds that the future is continually changing, then the use of the 2 × 2 matrix is about creating a set of scenarios that offers insights into the changing world, without privileging one scenario over the others. By taking the set of scenarios as a holistic view of the changing world it provides a wide-angled and helicopter view and understanding of the changing world in the here-and-now. Figure 37 provides an example of an impact/predictability matrix. There are two rules of thumb when engaging with the 2 × 2 matrix. First, the choice of critical uncertainties should be based on orthogonal or unrelated differences between the critical uncertainties. One uncertainty should not be related to or understood as a subset of the other uncertainty. Second, managerial intuition needs to be recognised, as this is part of making the implicit concerns explicit and should not be confused with the premise that the 2 × 2 matrix is a deductive approach. No matter which two critical uncertainties are chosen, all the issues previously identified as uncertain by the management team will ‘enter the field of play’ as uncertainty outcomes are deployed to build the set of scenarios (see step 8 below).

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Figure 37: Impact/Predictability Ranking Matrix.

Step 6 is about assessing the totality of the critical uncertainties and identifying, from the organisation’s perspective, the highest impact uncertainty and least predictable uncertainty. If an uncertainty has multiple plausible outcomes, then that is an indication that it is fundamentally uncertain. If the outcome is likely to be evident, then that is an indication that it is not fundamentally uncertain. As the management team discuss and negotiate between themselves their exchanges and agreement should be noted, as this will form the basis of developing the set of scenarios. Step 7 is about identifying and capturing plausible outcome for the chosen two critical uncertainties; let’s call them uncertainty A and uncertainty B. Once this is achieved the management team combine one uncertainty outcome from A with one uncertainty outcome from B. This process is repeated until four plausible scenarios are created. It is important at this juncture that the management team do not consider each scenario quadrant as a unique stand-alone view of the future. If this approach is taken the likely outcome will be the management team favouring one quadrant over the other three quadrants. Doing so narrows the view into and understanding of the nature of the changing world and limits the potential insights from the scenario process. Scoping scenario quadrants is set out in figure 38. As each of these four quadrants is conceptualised it is helpful to note the key headings that define and express each quadrant/scenario. Doing so helps individuals to de-

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Figure 38: Scenario matrix and headlines for each scenario.

velop their understanding of the quadrant/scenario. As everyone is unique, each member of the management team can express their understanding of the quadrant/scenario to stretch and develop collective understanding. It is likely that new words, phrases, and language will enter the strategic conversation here as unique insights are made explicit. Step 8 activity is about allocating plausible uncertainty outcomes (pale blue or pink as below) Post-it notes (i.e., events in a scenario) to the appropriate quadrant/scenario. This is helped by the previous step, where the noted headlines are used to guide allocation. Once fully allocated they become the foundations to develop a scenario story. The management team consider each of these outcomes/events and determine the time period within which the event will occur in the scenario. Each scenario story should have a past, present and future and these time periods should provide guidance as to where the event occurs in time. In developing the story, a rule of thumb is to place the outcome Post-it notes where there is a clear pathway from the past to the future. The pathway must be aligned with the headlines and be a logical step that leads to the end point of the scenario. As the story begins to become clear new outcome Post-it notes can be added where there is a clear gap in the (pathway or unfolding) story. As the new outcome Post-it notes are added there are likely to be links or connections to other pathways in the story. These links or connections should be noted and assessed further to understand the number of factors that are creating and leading to the end point of the scenario. More pathways strengthen the logic of the scenario. This process should be repeated for the other scenarios. Figure 39 is an of a scenario storyboard set out to the agreed time period.

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Figure 39: Scenario storyboard (with events in relevant time period).

In Step 9 the completed story should be talked out aloud by the management team to first of all ensure that the story is coherent and, second, to help them tease out implications and insights into the situation that the organisation is experiencing. The pathways noted in step 8 above should be assessed to understand the actors inherent in the pathways. Once noted, the management team can determine what, if any, pathways (and related actors) begin to explain the past and current experiences impacting the organisation. Step 10 is about naming the scenarios. The title of a scenario should be a few words that express the nature of and insights from the scenario, and the scenario itself. For example, as noted in Chapter 4, the CBC scenarios were titled ‘The Producer World’, ‘The Distributor World’, and ‘The Provider World’, with each scenario identifying the dominant actors and communicating their actions and intentions through technology to control the Scotch whisky organisation. The CBC management team realised that it was the potential of the technology deployed by the distributors and providers to (invisibly) take control of their organisation. These insights helped the CBC management team realise that pressure from customers to reduce prices arose from the increasing use of technology to exert control over their supply chains, as well as help customers increase internal efficiencies. The set of scenarios revealed to the CBC management team that the role of technology in changing supply chain dynamics and interaction with consumers was enabling actors to exert control over their organisation.

Phase 5 – Incubation Period, Reflections, and Building Support Workshop 2 is an intensive and immersive experience for the management team/participants and there is a need to provide reflective time and space for them to digest, consider, and reflect on the thinking, potential insights, and the set of scenarios. Standing outside of the ‘heat-of-the-moment’ of workshop 2 helps the management team to have collective conversations, sharing ideas and insights. As the management

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team begin to develop a deeper understanding of their present situation, this new understanding helps them to identify the potential priorities that need to be considered and addressed. The incubation period also provides an opportunity for the management team to consider planned or current initiatives and whether these remain valid given the insights from the scenario process. The planned or current initiatives may be refined, they may be dropped altogether, or they may become part of a much broader initiative as the organisation moves forward (into the future).

Phase 6 – Workshop 3 Including Exploring and Developing Scenario Insights, Mapping Strategic Implications, and Reframing the Business Idea Having had the opportunity to reflect on and discuss the insights emerging from their strategic conversations, inside and outside of workshop 2, the management team reconvene to begin to explore the implications of the set of scenarios. The set of scenarios should be taken as a holistic view of the changing world. If scenarios are treated independently then the likelihood is that the management team will favour one scenario over the other scenarios. The likelihood of that scenario emerging in the future is unrealistic. Favouring one scenario over the other scenarios is to be avoided at all costs. Favouring one scenario over the others falls into the ‘good’, the ‘bad’, and the ‘indifferent’. Favouring one scenario over the others will potentially preclude insights from the other scenarios being considered. Such an outcome will limit thinking and constrain understanding of the changing world in the here-and-now. There is a wide acknowledgement in the scenario literature that strategic options should be generated, discussed, and assessed or ‘wind-tunnelled’ (Leemhuis, 1985; van der Heijden, 2005; Chermack, 2022), with each scenario acting as a ‘test bed’ (Wilson, 2000). The intention is to determine which, if any, strategic options are viable in all scenarios. Whilst there is a clear rationale for such an approach, any strategic option that survives the ‘wind-tunnel’ potentially reduces risk in decision-making. However, there are four issues to consider with such an approach. First, is the strategic option an element of a broader strategic option? Second, is the strategic option a solution to a specific problem? Third, is the strategic option bounded by pre-scenario process thinking? Finally, is the strategic option addressing an operational issue or concern rather than helping the organisation survive and thrive in the future? The key feature of workshop 3 is to assess the overall implications from the set of scenarios. There are four questions that can be used to derive insights and implications. First, what are the key insights from the set of scenarios? Second, what are the key implications for the organisation from the set of scenarios? Third, what are the key processes that are creating change? Finally, what holistic strategic approach could be adopted to harness knowledge from the previous three questions?

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In phase 4 above, it was noted that the set of scenarios revealed to the CBC management team the role of technology in changing supply chain dynamics and interaction with consumers was enabling actors to exert control over their organisation. The CBC management team realised that ‘Producer world’ was unlikely to occur, though it was their ‘favoured’ scenario, as there was a historical over-production of whisky which would sit in bonded warehouses until either demand overall improved substantially or it would be released to continue to supply demand, and to support and protect a particular brand or the portfolio of brands. The CBC management team realised that the underlying cause of their concerns to meet the demands of lower prices from the supplier was their inability to understand the resupply triggers and processes of the supermarkets. The supermarket’s economic order quantity processes were hidden from CBC. The CBC management team had previously contemplated introducing a new sales order system to help them manage incoming orders from supermarkets (and other customers). The new sales order system revolved around five processes – order receipt, sales order generation, order fulfilment from stock, distribution, and sales invoice generation. However, the CBC management team recognised four flaws in their planned system. First, it was limited in scale to harness the insights from the set of scenarios. Second, their planned system would mean that they would still be reactive to customer orders. Third, there was no consolidation of customer orders to enable them to capture economies of scale and maximise efficiency in their production and bottling processes. Fourth, there was no overall integration in the end-to-end distilling to bottling processes, which could potentially lead to whisky stocks being withdrawn from the bonded warehouses and the upfront payment of taxes and duties to the government prior to the distribution to customers of their orders. Such actions would have an impact on working capital and cash flow management. Recognising the flaws in such an approach the CBC management team revisited the set of scenarios. First they mapped out a range of actors who would be central to the future, and then they mapped the actors to each of the three scenarios. Second, they mapped out five potential strategic actions required to address the insights from the set of scenarios, the actors involved, and how they could attempt to gain control over the situation. The five potential strategic actions were: (i) widen the range of services including standardised as well as customised products; (ii) extend product development capability for a customised world; (iii) develop and extend upstream alliances; (iv) develop operations efficiency and flexibility; and (v) review of the overall group strategy process. Like all organisations the CBC management team would need to recognise the internal politics that would be encountered. In addressing these strategic actions, the CBC management recognised the need for a single function to co-ordinate all these activities. Their original invention was developed around the idea of the ‘Customer Service Centre’, covering internal and external customers. Significant time was invested in working out the practical processes and activities that would be encompassed by the ‘Customer Service Centre’. One key

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aspect would be harnessing the technology deployed by the supermarkets/distributors and providers to enable CBC to access real-time data and information flows. The realtime data and information would be fundamental to the integration of production planning and sales ordering fulfilment.

Phase 7 – Final Summary Presentation Including Future Actions and Change Implications The final presentation was a combination of the scenario facilitator and members of the CBC management team. The content was a comprehensive coverage of all the events and outcomes of the scenario process. Several (internal) ‘critical friends’ were invited to this event. Setting out and explaining the scenario process journey helped to explain to them how the CBC management team developed their thinking and understood their changing world. From the journey they were able to harness the idea of the ‘Customer Service Centre’ to capture and engage with the emerging situation. The final presentation also provided the CBC management team to ‘rehearse’ their presentation. Articulating a coherent approach to the ‘Customer Service Centre’ helped them ensure that the ‘pieces of the jigsaw’ were in place and connected, and that no pieces of the jigsaw were missing. Feedback from the (internal) ‘critical friends’ further strengthens the case for investment in the all-encompassing ‘Customer Service Centre’.

Phase 8 – Management Team Closing Interviews The final phase of the scenario process is one-to-one and face-to-face interviews with all members of the management team who had participated in the scenario project. These interviews are again wide–ranging, where individuals can reflect on the process, exploring internal issues and issues related to the external landscape that the organisation occupies and experiences, across past, present, and future time horizons. The intention is to determine if, and how, their thinking and understanding has evolved. Pierre Wack (1985, p 139) reminds us of the challenge for those engaged with the scenario process: The key problem with scenario planning: the interface of scenarios and decision makers is ignored or neglected. By interface, I mean the point at which the scenario really touches a chord in the manager’s mind – the moment at which it has real meaning for him or her.

The scenario process may be new and novel for participants. The scenario process may be exciting for participants. The scenario process may be challenging for participants. The scenario process may be time out from the everyday routine for participants. However, if it does not change thinking and actions then it is a pointless process. Hopefully

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the guidance in this chapter and in the rest of the book will help everyone benefit from the scenario process. The book helps individuals understand their role in strategic leadership. Strategic leadership is about continually questioning the legitimacy of the organisation; continually sensing changes in the world and how these impact the organisation; and defining and redefining the business idea. The book also helps individuals understand the likely experience they will encounter when engaging with the scenario process. Their openness disposition, or the lack thereof, will be critical to making sense of the changing world. Their ability to absorb ambiguity that arises during the scenario process, their ability to stay open, not seeking premature closure as the easy option when experiencing ambiguity, are key characteristics of openness (Burt, Mackay, van der Heijden and Verheijdt, 2017). Characteristics such as patience in the face of a lack of clarity, attentiveness to subsequent issues that may emerge and the related implications, acceptance of novelty that questions assumptions, holding conflicting ideas open without prejudice, and a willingness to recognise the flaws in words and language and how these impact the ability to make sense of the changing world. The ability to understand and manage the challenge of ‘strategic conversation’, including the process of socially negotiated order, that is essential to make sense of the changing world. These are some of the characteristics of strategic leadership.

References Amara, R., Lipinsky, A. J. (1983) Business planning for an uncertain future: Scenarios and strategies, Pergamon Press, Fairview Park, New York. Burt, G., Mackay, D., van der Heijden, K., Verheijdt, C. (2017) Openness disposition: Readiness characteristics that influence participant benefits from scenario planning as strategic conversation, Technological Forecasting and Social Change, 124, 16–25 Chermack, T. J. (2022) Using scenarios: Scenario planning for improving organizations, Berrett–Koehler Publishers, Oakland, CA Eden, C. (1992) Strategy as a social process, Journal of Management Studies, 29 (6), 799–812 van der Heijden, K. (1996) Scenarios: The art of strategic conversation, John Wiley & Sons Ltd, Chichester van der Heijden, K. (2005) Scenarios: The art of strategic conversation (2nd ed), John Wiley & Sons Ltd, Chichester van der Heijden, K., Bradfield, R., Burt, G., Cairns, G., and Wright, G (2002) The sixth sense: Accelerating organizational learning with scenarios, John Wiley & Sons Ltd, Chichester Leemhuis, J. P. (1985) Using scenarios to develop strategies, Long Range Planning, 18 (2), 30–37 Miller, G. A. (1956). The magical number seven, plus or minus two: Some limits on our capacity for processing information, Psychological Review, 63 (2): 81–97 Ramirez, R., Wilkinson, A. (2014) Rethinking the 2x2 scenario method: Grid or frames? Technological Forecasting & Social Change, 86, 254–264.

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Schwartz, P. (1991) The art of the long view, Scenario planning – protecting your company against an uncertain world, Century Business, London Wack, P. (1984) The gentle art of re-perceiving; One thing or two learned while developing planning scenarios for Royal Dutch/Shell, Harvard Business School working paper 9-785-042 Wack, P. (1985) Scenarios: Shooting the rapids, How medium-term analysis illuminated the power of scenarios for Shell management, Harvard Business Review, November-December, 139–150 Wilson, I. (2000) From scenario thinking to strategic action, Technological Forecasting and Social Change, 65, 23–29

Index Adventures of Ideas’ (1933/1967) (Whitehead) 18 Amazon 10, 12 ambiguity 15, 27, 73, 138–141 anchoring bias 7 Apple Music 10 Appreciative System 39 Bare Essentials 98–100, 140 Berger, G. 36 Betamax format 11 bifurcation 5, 9 blandness 15–16 Blockbuster, business model 10–11, 15 – patterns 12–13 – technological innovation 12–13 blueprints 122–126, 156 Borders Bookstores 10 Bosma, B. 55 Bradfield, R. 171 British Airways 46 Burt, G. 21, 171 business failure 9–10 business idea 169–171 – bundles of social practices 61–62, 64–66 – CP and IPC 111 – fundamentals 62, 63 – Kinder-Care Learning Centres 64–66 – ongoing change and potentiality 63 – PRBV and rail transportation 121 – and reframing (see reframing) – workshops 79–80, 95 buyers-own-brands 84, 131 Cairns, G. 171 Cartesian dualism 4–5, 9 case studies – CLCS and IT (see CLCS and IT consulting industry) – CP and IPC magazines 107–118 – policy objectives 25–26 – political, socioecological, and economic imbalance 25 – PRBV and rail transportation technology 118–126 – project context and challenges 24–25 – review of and insights 26 – scenario project impact 26–27 https://doi.org/10.1515/9783110792065-008

– Scotch whisky and spirits sector, CBC Scotch (See CBC Scotch) – sustainable and integrated forest management 25 – technological innovation 25 CBC Scotch 73, 132, 133, 135, 153 – Customer Service Centre 149 – interview process and related activities 76 – management team 74–75, 139, 178, 180–181 – reframed business idea 90 – strategic actions 179–180 – supermarkets 180 – surprise free scenario 136 – Trust’s vision 74 – workshop schedule (see workshops) changes, nature of 2–5, 37. See also organisation/ organising – climate 24 – implications 181 – and innovation 37 – limited vision 6–9 – from meaningless to meaningful 15–17 – ongoing sensemaking 63 – planning system 43 – and potentiality 63 – research and analysis 18 – silent transformations 6–9 – technological 10 – unexpected shocks 6–9 Chatel, B. 36 Chia, R. 18, 22, 55, 60 CLCS and IT consulting industry 90–91, 132, 138–140, 149 – interview process and related activities 92 – management team 91 – over-arching change map 105 – reframed business idea 106 – surprise-free scenario 136 – System38 software 90 – workshop 92–106 client, ownership and engagement 158–159 Climate Change (Scotland) Act 2009 24 collective management 40, 44–46, 61, 156 communication constitutive of organisation 22, 54–55 Confederation of Forest Industries (CONFOR) 24, 154–155

186

Index

confirmation bias 7 constative activities 54 content providers 116, 117, 154 contextual environment – SWOT analysis 68–69 – uncertainty 37–40, 138 COVID-19 pandemic 1, 25, 74 CP and IPC magazines (publishing industry) 109, 153 – flagship programmes 107 – interview process and related activities 108 – joint management team 107 – workshops schedule 108–118 customer-oriented approach 79 Customer Service Centre 87–89, 142, 181 Cuthbertson, R. 52 de Jouvenel, H. 36 dialogue 5, 17, 21–22 digital money 1 Distributor World 82, 84, 178 dual income, no kids (DINKs) 64 Duncan, R. B. 38 electronic point of sales (EPOS) systems 142, 152 e-magazines 116 emergence 12, 14–18, 106, 116, 138 events and experiences 5, 7, 14–15, 23, 32, 63, 67, 131 – foresight 17 – insights and connections 33, 45 – isolation 12 – otherness 20–21 facilitators, scenario process 158–161, 164–165 Fisch, R. 45 flipcharts 79, 92, 110, 111, 172, 174 foresight 2, 17–20, 53 – creativity and reflexivity 19 – historical foundations of scenarios 34–37 – logic and reasoning 55 – memories of the future 18 – and otherness 20–21 – regimes of signification 19 Forestry Commission Scotland 154 Forestry Enterprise Scotland 155 Fouweather, I. 55 fragmentation 154–155 – management team 10

– New Structures 46 – opinions differences and 156–157 framing bias 7 genealogy and foundations – American Military 34–36 – French Tradition 36–37 – origins and evolution of scenario 32 – uncertainty in contextual environment 37–40 Godet, M. 37 The Godfathers 114–115 group composition 163–164 groupthink 8 Hamel, G. 7 Hernes, T. 61 hindsight bias 7 Hulu 12 hyperopia 7, 8 ICL, scenario planning 46–47 immediate gratification bias 7–8 incisions – organisation process 61 – strategic conversations and change 60–61 incubation period 86, 161, 178–179 infrastructure providers 116, 117, 154 Innovent 47 insights for organising 4–6, 8, 17, 21, 33, 46, 141, 157–158 – case study 126–128 – and implications 85–86, 102–103, 117–118 – initial interviews 131–132 – scenario development and 172–178 – during scenario presentations 26 – strategic conversations 73 interventions 16, 18, 23, 54, 73, 138 interview process 76 – closing interviews 181–182 – feedback and confirmation 92–94, 169–171 – management team 167–169 – and related activities 108, 120 – remarkable people 80–81, 95, 111–112, 120, 171 invaders 87, 116, 117, 139, 153 IT consulting industry, CLCS and 90–91, 132 – interview process and related activities 92 – management team 91 – System38 software 90 – workshop 92–106

Index

Janis, I. 8 Jefferson, M. 43 Jullien, F. 5, 6 Kahn, H. 34–36, 40–41 Kinder-Care Learning Centres 64–66 Kupers, R. 43, 44 Laing, R. D. 33 La Prospective approach 36–37 management team – business idea (see business idea) – CBC Scotch 74–75 – CLCS and IT industry 91 – closing interviews 181–182 – confusion and uncertainty 80 – expectations 166 – incubation period, reflections, and building support 178–179 – initial interviews 167–169 – PRBV 119 mapping socio–macroeconomic systems 41–49 mass-bespoke 100 matrix mapping 37 Mendel, P. 64–66 Michael, D. 49–51 microscopic-macroscopic (MICMAC) approach 37 Miller, G. A. 172 moment of stability 60 MS Rules OK scenario 100–101 Mukherjee, M. 52 myopia 7, 8, 162 Nair, A. K. 21 National Farmers Union (NFU) 24 nature of change 2–5 Nayak, A. 22 negative capability 73–74 – ambiguity 130 – epiphany moments 133–134 – insights and revelations 132–135 – insights from initial interviews 131–132 – key stakeholders 131 – language complexity 131 – in other contexts 143–144 – scenario planning process 130–131, 141–143 – and surprise-free scenario 135–141 – time and space 131

187

Netflix 11, 12–13 Nokia 46, 47 one-to-one interviews 75, 76, 130, 156 On Thermonuclear War (Kahn) 35 open-ended idea generation approach 78, 94, 110, 121 open-systems approach 37 organisation/organising 1, 59. See also business idea – belief systems 8 – bounded rationality 8 – business failure 9–10 – Cartesian separation 48 – communication constitutive of 22 – contextual environment 37–40 – entitiative 48–49, 53 – environment relationship 4 – events 9 – groupthink 8 – incisions, strategic conversations and change 60–61 – learning 49–52 – lessons for managers 13–14 – management team challenges 15 – managers, firefighting 3 – mental models 49 – plans and goals 8 – public goods 69–70 – reorienting thinking 60 – in research projects 73 – strategic conversations 59, 66–68 – SWOT analysis 68–69 Organization of the Petroleum Exporting Countries (OPEC) 41–42 otherness in scenario 20–21 patterns – blockbuster 12–13 – practice-based bundles 62 – technological innovation 12–13 Performative activities 54 PEST (Political, Economic, Societal, and Technological) 151 PESTLE (Political, Economic, Societal, Technological, Legal, and Ecological) 151 Phones 4u 10 Pickett, N. 35 Post-it notes 78, 94, 172–176 Prahalad, C. K. 7

188

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PRBV and rail transportation technology 118–119, 156 – business idea 122 – change process 7 119 – interview process and related activities 120 – management team 119 – workshops (see workshops) Producer World 82, 83, 133, 139, 178 Provider World 82, 84, 85, 133, 178 Rabobank 46–48 Ramirez R. 52 RAND Corporation 34, 40 reframing 23, 27, 40, 44–47, 52–54, 73, 126–128 – and business idea 89–90, 105–106 – capability 149–150 regimes of signification 19, 163–164 relational dialogue 5, 17, 21, 26 remarkable people (RP) 80–81, 95, 111–112, 120, 171 Sandberg, J. 16 scenario agenda 78–79, 94–95, 110–111, 161, 169–171 scenario-building workshop 83–85, 95–96 – Bare Essentials 98–100, 140 – business-as-usual 114 – codified service products 101 – development 81–83, 97–99 – e-commerce market 102 – familiar and predictable scenario 124 – fragmentation 116 – The Godfathers 114–115 – insights and implications 85–86, 102–103, 117–118, 125–126 – invaders 116 – MS Rules OK scenario 100–101 – New Constellations 114, 115 – New horizons 124 – Party of the Invaders 116 – remarkable people 113 – sense and simplicity 122–124 – Tough Choices 98, 101–102 – The World of two speeds 122, 123 scenario project – bias 151 – business-to-business interactions 153 – business-to-customer interactions 153 – CBC case (see CBC Scotch) – CLCS and IT (see CLCS and IT consulting industry) – Customer Service Centre 149

– digestion/reflection period 151–153 – fragmentation 154–155 – frame/reframing capability 149–150 – insights, forgotton 157–158 – issues and concerns 150 – JBA software 152 – knowledge limitations 151 – link to (strategic or policy) 153–154 – management team 148 – opinion differences and fragmentation 156–157 – ownership and engagement 158–159 – patience and openness 151 – planning challenges 162–163 – simplistic thinking 151 – timescale and stages of 167 scenarios process 2, 17, 21–22 – breakdowns 17 – design of 159–162 – dialogue and strategic conversations 21–22 – historical foundations 34–37 – impact 26–27 – insights and review of 26 – planning 32 – project, seeking clarity 148–150 – research projects 75 – as strategic conversations 22–24 Scenarios: The Art of Strategic Conversation (van der Heijden) 21 Schatzki, T. R. 62 Schwartz, P. 171 Scotch whisky and spirits sector. See CBC Scotch Scottish Environment Protection Agency (SEPA) 24, 154–155 Scottish Natural Heritage 155 Scottish Woodlands 155 self-distanciation 16, 17 self-serving bias 7 semantic transformation 54–56, 164 sense-making processes 2, 6, 9, 39, 55 sensitivity 20, 46, 51, 145 service providers 102, 116, 117 Shell scenarios 42, 171 silent transformations 6–9 – and otherness 20–21 – stable assumptions 6 small- and medium-sized enterprises (SMEs) 100 social facts 22 social interaction 5, 39, 54, 70 social practices, bundles of 61–62, 64–66, 70

Index

socio–macroeconomic systems 41–49 – attitude towards timescales 45 – balance of thinking 45 – building blocks 43 – entrepreneurial power 44 – orientation in behaviour 45 – plurality and 46 – scenario planning 46 – scenarios discontinuity 43–44 – Shell scenarios 42–43 – strategic conversation 45 – strategic planning 47 – uncertainty 43 speculative imagination 39–41 Spotify (digital music service) 10 STEEP (Societal, Technological, Economic, Ecological, and Political) 151 Stirling Council 155 strategic conversations 52–54, 126–128, – dialogue and scenarios 21–22 – flux and flow 66–68 – foresight creation 22 – group composition and culture of openness 163–164 – incisions and change 60–61 – language restrictions 23–24 – linear notion of time 23 – notion of the future 23 – safe space 51 – scenario end states 23 – with scenarios 2, 13, 16, 26 strategic implications 86–89, 103–105 – capability strategies 104–105 – mapping 179–181 – over-arching change map 105 – portfolio strategies 104–105 – reframing and business idea 89–90, 105–106 strategic leadership 5, 182 strategies for growth plan 90–92, 95, 98 surprise-free scenario 26, 82, 135–137 – ambiguity and uncertainty 138–141 – novelty and seduction of stability 137–138 Sustainable Development Goal (SDG) 13 24 SWOT (strengths, weaknesses, opportunities, and threats) analysis 68–69 technological innovation 1, 12–13, 84 temporal translation 127–128 textures, causal 37, 38

189

Thinking About the Unthinkable (1962) (Kahn) 35–36, 40 time in scenarios 126–128 Tower Records 10 truth-in-the-moment 141, 144 Tsoukas, H. 16 turbulence 39 uncertainty – and ambiguity 138–141 – contextual environment 37–40, 43 – grouping/clustering ideas 174–175 – multiple plausible outcomes 176 unexpected shocks 6–9 van der Heijden, K. 21, 40, 52, 53, 171 Vickers, G. 39 video-on-demand (VOD) service 12 vision, limited 6–9 Wack, P. 17, 42, 44, 46, 175, 181 Watzlawick, P. 45 Weakland, J. 45 Weick, K. E. 68, 69 Weiner, A. J. 36 Whitehead, A. N. 3, 5, 9, 14, 18, 22 Wilkinson, A. 43, 44 wind-tunnelling test 141, 142, 145, 179 Wittgenstein, L. 164 workshops – business idea 79–80, 95, 111, 121 – incubation period, reflections, and building support 178–179 – interview feedback 76–78, 92–94, 108–110, 120, 169–171 – mapping strategic implications 179–181 – reframing the business idea 179–181 – remarkable people (RP) 171 – scenario agenda 78–79, 94–95, 110–111, 120–121 – scenario building 80–86, 95–103, 111–118 – scenario development and initial insights 172–178 – scenario insights 179–181 – schedule 75, 92 – strategic implications 86–90, 103 Wright, G 171 YouTube 12