Wharton - Chapter 10

Chapter 10 is the longest chapter yet, but the author set to explain was certainly an out-of-the-box way of thinking. Typically, I think companies focus on contingency planning, a whole "if this happens, then we will do this", but this chapter shed light on a manner of planning that I had never heard of: Scenario Planning. Using the print industry and Knight-Ridder as examples, the authors walk through the components necessary to construct successful scenario planning.
Purely an imaginative thought process, an organization would put together a matrix and constructing cells out of any wealth of possibilities they may face. Certain attributes would be reliant upon other attributes, such as "may sink in the water" would only relate to "put on a sea vessel", and some are just impossible, such as their example of Full Employment to an economic firm. This matrix would be divided into cells, and these cells provide the basis of uncertainty for the firm to plan upon. This was all completed using a ten step process, and if there are problems, then feel free to start over.
For scenario planning to be successful, it is important to gain the support of top management, get diverse inputs when constructing the matrix, and stimulate new strategic options. Nobody can predict the future, but this mechanism can help an incumbent firm be prepared for it, and not "stick their head in a hole" (Ostrich example) and hope it will just go away. Hodgson (2004) suggests that without explorations of the future, (as opposed to a direct plan with little scrutiny) to deal with possible uncertainties, strategic planning "creates a default scenario: ‘a future that validates the plan and this view of the future dominates … decision making’." Traditional thinking about the future works well in a relatively stable environment, and has proven successful in the past due to the incremental nature of industry changes. Today's innovation-centric businesses and the availability of vast amounts of information available so quickly to so many people has changed the way businesses develop must their strategy, and scenario planning skews away from the traditional to a new arena to accommodate for this fast-paced change.
If anyone is interested, there is a great article on Scenario Planning titled: "Scenario Planning: An Innovative Approach to Strategy Development" by M. Conway of the Swinburne University of Technology. You can find it here: http://www.aair.org.au/jir/2004Papers/CONWAY.pdf