Understanding future uncertainty
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Understanding future uncertainty Scenario Planning ¡s still the leading approach for strategic planners Frances O'Brien years whereas an organisation in the media industry
The aim of this article ¡s to offer an insight into the
will see more rapid change in technology and
current practices of assessing uncertainty in the context of strategic planning as derived from a series of recent interviews with strategic planning
consumer tastes and will hence use a shorter planning horizon.
personnel. A total of 106 strategic planning individuals were contacted from a selection of public, private and non-profit organisations. Interviews were conducted with personnel from 19 UK organisations and 2 US subsidiaries based in the UK. The size of each organisation varied between and within sectors but the majority of the organisations were large with annual turnover and balance sheet assets each of over Lib and more than 10,000 employees.
External uncertainties The external environment within which any organisa-
tion operates is a complex system of inter-related forces. Understanding the complexities and interactions is essential for finding an appropriate future
direction for the organisation. To capture the uncertainty around the external environment, six generic forces (Competitive, Social, Technological, Economic, Environmental and Political) were presented to those interviewed as a starting point for discussion.
-00000-
The research described here covers individual's
Although competition is often regarded as the main external driver, political and economic uncertainties were most frequently cited with competitive uncertainties having more prominence overall than social and technological. Environmental issues, despite their topicality, did not find any prominence unless
perceptions of the uncertainties faced by their organisations and their own explanations of the processes and methods used to handle them within the context of strategic planning.
To put the 'uncertainties' into context it is important
they influenced a factor in another category. For
to note that planning horizons used for strategic
sectors but not so much within sectors. Such cross-
example, regulations regarding CFC emissions were mentioned by an organisation who did not specifically mention the state of the environment as an individual factor important to their organisation, yet the connection between the regulatory and environmental issues is clear.
planning horizon is usually determined by how far
The individual factor most often mentioned was the
planning are not the same for all organisations - see Table 1 showing the distribution of length of planning horizons amongst the organisations.
The length of planning horizon varied between
sector variation is not surprising since length of
'state of the UK economy', closely followed by 'regulatory imposition', to be expected given the
into the future an organisation commits its resources or the rate of change within the industry. So for an
prominence of political and economic factors as
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