Scenario Planning in Organizations: How to Create, Use, and Assess Scenarios (Organizational Performance)

297 Pages·2011·1.77 MB·English

by  Thomas Chermack

More Praise for Scenario Planning in Organizations
“All CEOs, university presidents, leaders of national nonprofi ts, and politi-
cians face the same problem: coping with uncertainty. Scenario planning
addresses this central problem. One cannot attend a planning session
in any large organization without the topic of scenario planning arising.
Professor Chermack puts the various approaches to scenario planning in
a highly readable and useful context. For those of us who have used a
variant of scenario planning for many years, there is much to learn in this
approach. Professor Chermack is well on his way to becoming a major
resource for this important planning tool.”
—Vance Opperman, President and CEO, Key Investment, Inc.; Audit
Committee Chair, Thomson Reuters; and former President, West
Publishing Company
“With extensive expertise, Tom Chermack spotlights scenario planning as
a fundamental tool used by organizations to achieve long-term sustain-
ability. This book helps me guide diverse management teams through
strategic decision and problem-solving processes using a collaborative
and forward-thinking approach.”
—Carla McCabe, Director of Human Resources, Technicolor
“Scenario planning has benefi tted our entire organization by helping us
understand a volatile environment and how to move forward. Scenarios
have helped us think through options, create insights, and spark innova-
tive ideas. Chermack’s approach held us accountable and emphasized
creative thinking as well as assessing where and how the scenarios add-
ed value.”
—James Steven Beck, MBA, CPA, Vice President—Administration, Eltron
Research & Development, Inc.
“Professor Chermack has made the mysterious process of scenario plan-
ning available in a format accessible for both leaders of large corpora-
tions and small business owners. Creating a common working language
about the future is essential for the long-term success of any enterprise.
Tom’s clear guidelines provide practical tools for organizations to create
scenarios that will help them discover new ways of thinking, planning,
and being.”
—Kim Cermak, President and COO, KDC Management, LLC
This page intentionally left blank
SC E N A R IO
PL ANNING
IN ORGANIZATIONS
A Publication in the Berrett-Koehler
Organizational Performance Series
Richard A. Swanson and Barbara L. Swanson,
Series Editors
S C E N A R I O
PL ANNING

IN ORGANIZATIONS
HOW TO CREATE, USE, AND
ASSESS SCENARIOS
THOMAS J. CHERMACK
Scenario Planning in Organizations
Copyright © 2011 by Thomas J. Chermack
All rights reserved. No part of this publication may be reproduced, distributed, or trans-
mitted in any form or by any means, including photocopying, recording, or other electron-
ic or mechanical methods, without the prior written permission of the publisher, except in
the case of brief quotations embodied in critical reviews and certain other noncommercial
uses permitted by copyright law. For permission requests, write to the publisher,
addressed “Attention: Permissions Coordinator,” at the address below.
Berrett-Koehler Publishers, Inc.
235 Montgomery Street, Suite 650
San Francisco, California 94104-2916
Tel: [phone], Fax: [phone]
www.bkconnection.com
Ordering information for print editions
Quantity sales.Special discounts are available on quantity purchases by corporations,
associations, and others. For details, contact the “Special Sales Department” at the
Berrett-Koehler address above.
Individual sales.Berrett-Koehler publications are available through most bookstores. They
can also be ordered directly from Berrett-Koehler: Tel: [phone]; Fax: (802) 864-
7626; www.bkconnection.com
Orders for college textbook/course adoption use.Please contact Berrett-Koehler:
Tel:[phone]; Fax: [phone].
Orders by U.S. trade bookstores and wholesalers.Please contact Ingram Publisher
Services, Tel: [phone]; Fax: [phone]; E-mail: customer. service@ingram
publishers ervices. com; or visit w ww .ingram publishers ervices. com/O rdering for details
about electronic ordering.
Berrett-Koehler and the BK logo are registered trademarks of Berrett-Koehler
Publishers,Inc.
First Edition
Paperback print edition ISBN 978-1-60509-413-7
PDF e-book ISBN 978-1-60509-414-4
IDPF e-book ISBN 978-1-60509-908-8
2011-1
Production Management: Michael Bass Associates
Cover Design: Irene Morris
Cover Photos: © Matthias Clamer/Stone+/Getty Images
Contents
List of Figures vii
Foreword by Louis van der Merwe xi
Preface xv
P A R T O N E
FOUNDATIONS OF SCENARIO PLANNING
1
Introduction to Performance-Based Scenario Planning 3
2
Theoretical Foundations of Scenario Planning 29
3
The Performance-Based Scenario System 61
4
Scenario Case Study 71
P A R T T W O
PHASES OF THE PERFORMANCE-BASED
SCENARIO SYSTEM
5
Phase 1—Project Preparation: Understanding Purpose and
Building Support 81
6
Phase 2—Scenario Exploration: Breathing In 101
7
Phase 3—Scenario Development: Digging Deeper 127
8
Phase 4—Scenario Implementation: Putting Scenarios to Use 169
9
Phase 5—Project Assessment: Documenting Results 189
vi CONTENTS
P A R T T H R E E
LEADING SCENARIO PROJECTS
10
Managing Scenario Projects 217
11
Human Perceptions in the Scenario System 233
12
Initiating Your First Scenario Project 241
References 247
Index 259
About the Author 271
List of Figures
1.1 Scenario Planning Definitions and Outcome Variables
1.2 Steps in Developing and Using Scenarios
2.1 A Theory of Scenario Planning
2.2 A Map of North America
3.1 The Context of Scenario Planning
3.2 Conceptual Model of the Scenario System
3.3 The Performance-Based Scenario System
3.4 The Performance-Based Scenario System—Scenario-Building Component
3.5 The Performance-Based Scenario System—Scenario Deployment
Component
4.1 Technology Corporation Organization Chart
4.2 Technology Corporation’s Small Business Innovation Research/Small
Business Technology Transfer Proposals Submitted 2007–2008
4.3 Technology Corporation’s Small Business Innovation Research/Small
Business Technology Transfer Proposals Funded 1984–2008
4.4 Technology Corporation’s Active Projects 1984–2008
5.1 The Performance-Based Scenario System—Project Preparation Phase
5.2 Scenarios Are Like Cherry Trees
5.3 Technology Corporation’s Time Line and Scope
6.1 The Performance-Based Scenario System—Scenario Exploration Phase
6.2 The Basic Process of a SWOT Analysis
6.3 Technology Corporation’s Basic Process for SWOT Analysis
6.4 Technology Corporation’s SWOT Analysis
6.5 Technology Corporation’s Innovation-Development of Intellectual
Property
vii