A network-based futures method for strategic business planning
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A network-based futures method for strategic business planning JH Powell1 and RG Coyle2 1
Bath University, UK, 2 Independant consultant
Many strategic decisions in business are made in a context which the decision makers perceive as uncertain, complex and opaque. A method, based on Rhyne's ®eld anomaly relaxation technique, is described of generating a network of states which characterise the environment or context in which strategic decisions are to be made. These states represent possible future conditions for the business, and knowledge of them allows improved strategic understanding and decision making to be achieved. This paper describes the method, using a representative real-life application to illustrate the process. Keywords: management; networks and graphs; strategic planning
Scope and Introduction Context Strategic decision making in business has to cope with a complex and uncertain environment. Economic and ®nancial conditions, procurement policy, regulatory constraints, employment market conditions and customer con®dence can all change relatively rapidly in the time scale of strategic implementation. Neither are the activities of the competitors to be ignored. This complexity often induces either a confusion in the mind of the strategic decision maker or a ®xation on the present state of affairs which is unwarranted when the long time scales of strategic implementation compared with the speed of movement of the environment. In attempting to make this complex and confusing environment more accessible to executives, the authors applied the method of Rhyne.1,2 Published accounts and reviews appear in Gappert,3 Wood and Christakis4 and Coyle et al.5 Known as Field Anomaly Relaxation (FAR) this approach characterises the situation pertaining to, for example,6 the political stability of a region by means of a set of indicators, the level of which de®ne the state of the system of interest adequately in the view of the client. This then serves to generate a set of possible future states which are then presented in a tree form, where the possibilities of one state developing from another are displayed. In Rhyne's method this development can take place only in one direction, along a time axis. If a state is revisited it can be
Correspondence: JH Powell, Bath University, Claverdon Down, Bath, B4 27AY, UK.
duplicated, appearing again later in the development of the situation. Whereas in the regional development studies for which it has been so successful the representation of the future as unfolding unidirectionally may be appropriate, one of the important distinguishing characteristics of the business problem is that states are (potentially at least) revisited. A procurement policy can be reversed. Customer con®dence can be regained. The stock market goes down as well as up. This meant that the tree form of FAR was unhelpful for strategic decision-making as opposed to context projection. This research therefore extended the FAR
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