The “strategy is dead” literature that has become popular over the last decade has greatly overstated the capacity of the “agile organization” to be operationally prepared for inevitable changes in markets, technologies, supply chains, economics, government policies, etc.

With obvious exceptions (e.g., software development), the majority of organizations are faced with de facto strategic decisions that have long-term implications — meaning, beyond the normal business and planning cycle. For example: what kinds of people do you need to hire? What kinds of distributions relationships will be required? For what products, services? More fundamentally, where is your growth, which geographical markets, consumer segments?

It is hard to escape the strategic nature of these questions. They require insights into future market and operating conditions. Scenario analysis and planning can greatly help meet this challenge by exploring hidden risks, uncertainties as well as upside opportunities. Critically, in contrast to the point made in the original piece by Magnus Lindqvist above, the scenario value is NOT about predicting a single future, but systematically exploring a range of alternative future business environments (scenarios) and devising a set of strategies/actions that promise positive results across most (if not all) of these future business environments.

(By the way, this is exactly what US automakers did NOT do during the 1990s, when demand for SUVs, mini-vans and pick-up trucks was booming. Oil prices were low, profits were high and no serious investments were being made in fuel efficient vehicles powered by alternative technologies. The sad consequences of this for Detroit are now well-known.)

A few critical clarifications are important here:

1. Scenario-derived strategies (which promise to work across a range of future operating environments) should never be static. Paul Holmstrom, above, is suggesting something very similar. Contingency plans are critical in a world of accelerating change and widespread uncertainty. This is where trend analysis or trend spotting is useful — as a way of continuously monitoring external events and adapting strategy and business plans accordingly. Ideally, the scenario-based strategy process itself will identify a range of contingent actions, which themselves should be “dress rehearsed.”

2. The strategy cycle has become greatly compressed because of globalization, the effects of inter-connected networks, disruptive technologies and now the potentially large but still uncertain effects of climate change. A scenario-type strategy exercise is important to undertake every 4-5 years, but monitoring of emerging business trends and conditions should be continuous.

3. Scenario-based strategies should be “hard-wired” to business plans and actions. If this is not explicit in the process, the resulting hard work will be left in a project report binder to gather dust. The future happens much faster than we anticipate. We must begin to anticipate and make decisions NOW if we are to be prepared for the challenges we will be facing 3,5, 10 years from now and beyond.

Thank you. Peter Kennedy, The Futures Strategy Group

An hour later one of our colleagues spoke of a major strategic initiative over a long period of time, which has caused the client company to realize that their conception of customers and potential employees had to be completely revised as i had not changed for 15 years. They had been so busy trendspotting and adapting that they had missed the slow change.

In his latest book Mintzberg revisits his conception that real strategy changes very rarely, maybe 10-20 years inbetween changes. What goes on in the shorter term is strategic adaption to short term trends.

I agree with you Martin that there is great risk that we confuse short term trend adaption with long term strategic intention.