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The opportunities for HRD in scenario planning Thomas J Chermack a University of Minnesota, 696 Grand Avenue#8, St. Paul, MN, 55105, USA b University of Minnesota, 696 Grand Avenue#8, St. Paul, MN, 55105, USA Phone: Phone: 612 387 1951 E-mail: Published online: 07 Aug 2006.
To cite this article: Thomas J Chermack (2004): The opportunities for HRD in scenario planning, Human Resource Development International, 7:1, 117-121
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The opportunities for HRD in scenario planning
Thomas J. Chermack University of Minnesota
Simply to be a human being is to be a futurist of sorts. For human freedom is largely a matter of imagining alternative futures and then choosing among them. Conversely, to be a good futurist, one must at least aspire to being a good human being. One must care about the welfare of others. One’s visions of the future must be informed by more than the science of what is or an imagination for what might be; one’s visions of the future must also be informed by a sense of what ought to be.
(Ogilvy 1996: 5)
Human resource development professionals claim to be concerned with the
thoughtful application of tools and interventions that can have a positive impact
on the lives of organizational workers, managers, executives, communities and nations. Are they also concerned about the manner in which such beneficial practices
might be carried out in the future? In a world of increasingly rapid change, scenario
planning has emerged as a tool for considering multiple plausible futures, embracing multiple differing views on what ‘better’ futures might and ‘should’ look like. The
opportunity to own this potentially strategic tool is and has been staring HRD
professionals in the face, yet little has been done to take advantage of this situation. Scenario planning was first introduced to HRD professionals by Provo et al. (1998). The authors outlined the following five key connections between HRD and scenario
planning: (1) increased knowledge about scenario planning can leverage HRD to become a shaper of business strategy; (2) implementation of actions resulting from
the scenario-planning process often require HRD expertise; (3) the connection
between scenario planning and organization development or change efforts implies a domain of HRD; (4) the theory of the scenario-planning process can benefit from
learning expertise in HRD; and, finally, (5) scenarios were advocated to consider the
future of HRD itself. This article further stresses these important opportunities and suggests ways that HRD professionals can engage in the development and ownership
of the scenario-planning process.
Scenario planning is a practical alternative to strategic planning as it avoids the pitfalls of attempts at prediction. The intent of scenario planning is to challenge what
members of organizations assume to be true by exploring stories that cover a wide
range of potential outcomes. Chermack and Lynham defined scenario planning as ‘a process of positing several informed, plausible and imagined alternative future
environments in which decisions about the future may be played out, for the purpose
of changing current thinking, improving decision making, enhancing human and organization learning and improving performance’ (2002: 16). Given that the
HRDI 7:1 (2004), pp. 117–121
Human Resource Development International ISSN 1367-8868 print/ISSN 1469-8374 online ª 2004 Taylor & Francis Ltd
http://www.tandf.co.uk/journals DOI: 10.1080/1367886032000099044
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interests of HRD professionals incorporate all of the intended outcomes of the scenario-planning process, HRD professionals ought to be very much in favor of a
process such as scenario planning, provided it produces results.
There are three areas that have been neglected by the ‘futurists’ who developed the scenario-planning process, or three opportunities for development that exist for
HRD professionals. These are 1) the construction of the theory of the scenario-
planning process, 2) research around the effectiveness of the process, and 3) the development of evaluative tools. Each of these marks a critical element that the
pioneers of scenario planning have failed to address.
Theory
There is no theory of scenario planning. While many prominent scenario-planning
practitioners have developed significant variety in their modes of application (Schwartz
1991; Georgantzas and Acar 1995; van der Heijden 1997; Ringland 1998; Godet 2001), none has articulated a core set of theoretical foundations or provided efforts to
develop theory. A core pitfall of strategic planning has been the failure to go beyond
practice and provide the theory and research to support the process (Mintzberg 1994). The work of several scenario-planning pioneers should be applauded and it is time to establish the theoretical validity of the process as well as some guidelines to limit the
atheoretical application that so often leads to random consulting activity providing more damage than benefit (Swanson 1999; Micklethwait and Woolridge 1995).
An examination of the most prominent scenario-planning literature reveals only
one mention of the word ‘theory’. Georgantzas and Acar (1995) provide an appendix titled ‘theoretical foundations of scenario planning’. In it is a description of the
prevailing general methods of approaching the scenario-planning process. Methods
are not theory (Swanson 1999). Torraco (1997) defined theory as a description of what a phenomenon is and how it works. Given the myriad of different methods for
conducting scenario planning, it appears that scenario planning is clearly a process.
But there is still nothing that points to how this process works. Other authors do not even mention the word ‘theory’ in their indexes or tables of contents. This situation
in scholarly journals is no better. There are no scholarly articles that describe any
theory and its direct relation to scenario planning. Some active practitioners provide hints towards theoretical domains that might
inform the scenario-planning process, for example, van der Heijden (1997) provides
the basis for a close link to constructivist learning in the scenario-planning process, and Schwartz (1991) suggests that there is a close tie to systems thinking and
decision making. However, these are not clarified and the links are not explicitly
developed or tested through any form of research, nor are any implications for research or suggestions for research offered.
Research
There is little evidence of any research happening in the field of scenario planning. However, there are two studies to note. Shoemaker (1995) conducted a study of
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MBA students and their perceptions of changes in projections after considering plausible futures. Shoemaker’s study revealed that scenarios seem to have altered
managers’ and MBAs’ perceptions of what might happen in the future, but do not
constitute a rigorous evaluation of the effects of scenario planning. Phelps et al. (1999) conducted an empirical study of the effects of scenario planning on
participants in two major scenario-planning projects. Their results revealed that
scenario planning would appear to affect managers’ abilities to consider alternatives that they would not previously have considered, and that participation in scenario
planning seems to produce financial benefits if decision makers were able to challenge
what they believe to be true. This study marks the only true attempt towards experimental research in the domain of scenario planning. Daimler-Benz reported
success with the use of the scenario-planning process in a ‘case study’ in 2001. While
this ‘case study’ described the process of scenario planning implemented among a team of Daimler-Benz executives, it provides little more that anecdotal evidence that
the process successfully provoked new insights.
The most notable and most cited example of scenario use, and, for that matter, scenario development (many of today’s important scenario-planning practitioners
have had a turn as head of corporate planning), is in the Royal Dutch/Shell Oil
Company. Managers at Royal Dutch/Shell began using scenarios and scenario planning in the 1960s, and, by the 1970s, had instilled a process of scenario planning
as their primary means of coping with the future. Because Royal Dutch/Shell’s
managers had used scenarios to consider the scenario of skyrocketing oil prices, when the oil crisis hit during the 1980s after the Yom Kippur war, Shell was prepared.
Having previously considered what their reactions might be in such a predicament,
their reaction time was reduced and, having given forethought to the probability of the situation, they did not make investments that would potentially have led to the
company’s bankruptcy. Further, they could respond with well-thought-out actions
that had been tested, along with their implications, in numerous hypothetical situations.
While the performance of Royal Dutch/Shell is one form of evidence that the
scenario-planning process might work, its examples and stories do not constitute research. Research has been defined as ‘close and careful study’ (Swanson 1997: 16),
and cannot be equated with anecdotal evidence of success that might simply be
attributed to chance. What is needed in the domain of scenario planning is a comprehensive research agenda that incorporates both quantitative and qualitative
approaches to assessing the results, experiences and effects of participation in the
scenario-planning process.
Evaluation
Because pioneers of scenario application in business contexts have not provided the
proper means for evaluation, the process has long been applied without sound assessment of results. If HRD professionals are to reap the benefits of a potentially
critical tool such as scenario planning, methods for evaluation must be developed.
Given an understanding of both learning and performance perspectives, HRD professionals are in a prime position to develop comprehensive methods of
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evaluation. Currently, in the absence of rigorous and thoughtful evaluation tools, scenario planning is evaluated on the basis of participant satisfaction, which in no way
provides a sound means for making important statements about the effectiveness of
the process. Many HRD professionals may not see the link between HRD and scenario
planning, but HRD professionals can provide much in the development and
facilitation of the scenario-planning process because of their expertise in learning, performance, research, theory building and evaluative techniques (Provo et al. 1998). This article has directly exposed the contributions that they can make. Considering
these potential contributions, it is my conclusion that HRD is poised to own the scenario-planning process, the construction of its theory, the implementation based
on research and the development of its evaluation. The opportunity presented here is
a tool that has the potential to allow individuals and organizations to construct their own futures – a powerful tool indeed. If HRD is to be at all strategic in its attempts to
develop individuals and organizations, its practitioners will appreciate its value. An
exceptional opportunity will be lost if strategic scenario planning is not claimed and developed, and HRD professionals are in a prime position to do so.
Address for correspondence
Tom Chermack
University of Minnesota 696 Grand Avenue #8
St. Paul, MN 55105
USA Phone: 612 387 1951
E-mail: [email protected]
References
Chermack, T. J. and Lynham, S. A. (2002) ‘Definitions and outcome variables of scenario
planning’, Human Resource Development Review 1(3): 366 – 383.
Georgantzas, N. C. and Acar, W. (1995) Scenario-Driven Planning: Learning to Manage
Strategic Uncertainty, Westport, CT: Quorum.
Godet, M. (2001) Creating Futures: Scenario Planning as a Strategic Management Tool,
London: Economica.
Micklethwait, J. and Woolridge, A. (1997) The Witch Doctors: What the Management Gurus
Are Saying, Why It Matters, and How to Make Sense of It, New York: Times Books.
Mintzberg, H. (1994) The Rise and Fall of Strategic Planning, London: Prentice-Hall.
Ogilvy, J. (1996) ‘Scenario planning as the fulfillment of critical theory’, Futures Research
Quarterly, 12(2): 5 – 33.
Phelps, R., Chan, C. and Kapsalis, S. C. (2001) ‘Does scenario planning affect performance?
Two exploratory studies’, Journal of Business Research, 5(1): 223 – 32.
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Provo, J., Lynham, S.A., Ruona, W. E. A. and Miller, R. (1998) ‘Scenario building: an integral
methodology for learning, decision-making, and human resource development’, Human
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Ringland, G. (1998) Scenario Planning: Managing for the Future, New York: Wiley.
Schwartz, P. (1991) The Art of the Long View, New York: Doubleday.
Shoemaker, P. J. H. (1995) ‘Scenario planning: a tool for strategic thinking’, Sloan
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Swanson, R. A. (1997) ‘HRD research: don’t go to work without it’, in R. A. Swanson and E.
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Swanson, R. A. (1999) ‘The foundations of performance improvement and implications for
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(eds) Human Resource Development Handbook, San Francisco: Berrett-Koehler, pp. 114 –
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