Strategic Foresight

Question 1

Methods for improving forecasting results (4)

Answer 1

• Trend Analysis: A forecast is calculated by using a linear or non-linear regression equation with data from the past.
• Delphi method: Uses the experts’ collective intelligence in an iterative estimation-feedback process.
• Information Markets: Participants can trade their beliefs through stocks and the stock prices and reflects the participants‘ aggregated beliefs regarding the future.
• Scenario Analysis: Several scenarios are developed to show possible future outcomes.

Question 2

Advantages of scenario analysis (compared to other forecast approaches)

Answer 2

• Multiple possibilities instead of one best answers (traditional strategic planning)
• Involve subjective interpretation + objective analysis (simulation only numbers)
• Investigates several objective analysis simultaneously (unlike contingency planning)

Also helps managers be aware of environmental uncertainties and confront with different future states. Future happenings and possible reactions. Combine quantitative and qualitative input data.

Question 3

5 stages of scenario planning (description and activities

Answer 3

1. Orientation: Key issue and associated challenges determined. Time frame and definitions
2. Exploration: brainstorming to provide understanding of driving forces of team members. Identify uncertainties with impact on success criterion
3. Scenarios and narrative creation: Critical uncertainties drawn and key characteristics identified and determined. Description for each evaluated possible scenario. Awareness that future could be a mix of several
4. Options consideration: play through each scenario to get implications. Alternative strategic decision/option also evaluated
5. Integration of scenarios into current management process: providing and implementing early warning signals but possible scenario outcomes. Effectiveness of decisions evaluated to improve process

Question 4

Core challenges/tasks in scenario learning?

Answer 4

1. Understanding about the present and past: Identify key forces ex tech changes, emergence of new competitors that will shape future
2. Describe variety of potential futures to form strategic decisions
3. Further evaluate how this futures would look like and draw specific cases,
4. Identify appropriate indicators to track
5. Link to specific decisions: different future views linked to decision/strategy
6. Link to analysis process: understand and evaluate possible outcomes and link to keys
7. Link to organizational procedures: sharing insights of developers gain
8. Involve decision makers: Must be involved. Integration of futures into decision making process.

Question 5

Advantages of scenario planning concept

Answer 5

• The interdependence of different factors is analyzed (compared to ex SWOT)
• Managers must conciser more than one path
• Understanding of the sensitivity of potential environmental shifts
• Decision based on more than quantitative data
• Further understanding of trends, uncertainties and weak warning signals
• Less complexity and communicative

Question 6

Disadvantages of scenario planning concept

Answer 6

• Time consuming
• Assigned to spec staff and does not involve actual line managers
• Abstract, not quantitative and not grounded on experience
• Subjective identification of influencing factors and projections
• Scenarios not taken too seriously
• Often not translated into strategic planning processes