Peter Schwartz, the author of the “The Art of the Long View” gained inspiration to write this book from the practical success of using scenarios in light of the 1980s oil crisis. Scenario (or contingency) planning, addressed by P. Schwartz, represents the way organizations and people may use to think about their future. Importantly, scenarios shall not be associated with predictions, but rather one’s perceptions about the implications of current decisions under future environments (Schwartz 5-6). It is underlined that dreaming up a scenario is only possible, if a specific decision is concerned (e.g., expanding a business to a given country, opening up a new direction of the business).
Already while considering the definition of scenario, proposed by Peter Schwartz, and the basic of the application of contingency planning approach, one can trace the differences between it and traditional managerial planning. Firstly, traditional planning seeks to build up the most probable picture of future external and industry environmental development in order to determine the directions of future actions. In this case, the single perception of the future trends, characterizing the environment in short-, medium and long-term perspectives, is used as the starting point for making a decision. On the contrary, the scenario planning focuses on elaborating multiple visions of the developments that will possibly occur within external and industry environments in the future. Moreover, it views an initial decision as a starting point for analysis, considering its implications in light of different scenarios, rather than aims to create a single picture of most probable path of the environment’s development. Importantly, the final result of the traditional planning process is manifested by the production of the most accurate picture of the context, whereby a business will operate in a specific perspective. Contrariwise, the expected result of contingency planning is making the best decision that can best suit envisaged changes in an organizational environment.
The language of traditional and contingency planning is also very different. Traditional planning concentrates on extrapolating existing knowledge about the environment and the trends of its development to the future. This language can be addressed as the language of facts. At the same time, contingency planning goes beyond facts, and includes perceptions in order to get managers exposed to the complexities and uncertainties, and let them be prepared to virtually any development (even if it does not seem likely today).
Furthermore, as opposed to traditional planning, the art of the long view uses the language of stories instead of conventional business language. Such approach helps an individual to uncover ever new possible avenues of a situation’s development und develop a multidimensional vision of the future implications of a specific decision under different circumstances. It is also suggested that scenarios are given specific names, similarly to those of stories (Schwartz 11)
Moreover, in his “The Art of the Long View” Peter Schwartz emphasizes the need to “uncover” decisions. The process of uncovering decisions includes elements that are conventionally not discussed with regard to traditional planning process. For instance, “uncovering a decision” provides for making a decision in a consciousness manner, so that special emphasis is put on situations, whose implications a decision-maker cannot understand or feels uncomfortable about. Moreover, contingency planning focuses not only on envisaging possible changes in the environment, but tackles the outlook of a decision-maker. The consideration of one’s mindset (e.g., outlook, attitudes, political views) within the context of decision-making and parallel imagination of other mindsets helps one to be more objective, when developing scenarios and making a decision, based on its possible implications in light of envisaged scenarios. Underlining the need to first look inward is a crucial peculiarity of contingency planning, as opposed traditional planning, focusing on facts, rather than perceptions.
It is also worth mentioning that traditional strategic planning tends to focus on broad questions in light of predicted future situation. Contingency planning provides one with the opportunity to continuously relocate the focus from a narrowly formulated question to broad economic, societal and environmental trends.
Similarly to traditional strategic planning, contingency planning involves research phase. However, the scope of the above researches is highly different. Traditional strategic planning approach focuses on considering specific factors and forces, shaping external and industry environment for the time being. Most commonly, only nation-wide (or industry-wide) pictures are taken into account. On the contrary, contingency planning is based on considering global trends. Specific research domains, peculiar for this type of planning, include prospective scientific innovations, perception-shaping events and trends, music (as a means of expressing feelings) and fringes (events and trends, going beyond conventional approaches and perceptions).
Given the different focuses of research, contingency planning provides for utilizing non-conventional sources of information, such as the authors of challenging concepts, “knowledge filters” (e.g., universities, think tanks and independent experts). It is also suggested to look beyond the scope of one’s specific specialty and put oneself into challenging environment to become able to unveil the “sources of surprise” and develop multiple perspectives.
The processes of creating scenario building blocks and strategic planning have some similarities. Both of them start with considering the major driving forces that can considerable impact the outcome of a specific event or the implications of a decision. Moreover, both provided for similar categorization of driving forces, such as political, economic, social, technological, environmental and legal. As some of the driving forces or trends can be obvious to one person and not so clear to another, exercising both processes frequently involves brainstorming and other tools of teamwork. Moreover, in both cases a critical role is played by determining the significance of specific driving forces and an extent to which they are certain (Schwartz 142).
While the process of scenario building blocks significantly resembles the one of strategic planning, the following composition of scenarios is peculiar to contingency planning. The rationale for that deals with the fact that the critical focus of scenario planning concerns unveiling multiple perspectives and securing a business’ readiness to different developments, even if they seem unlikely. The process of scenarios’ composition includes inter alia determining the intersections between converging forces and designing at least one scenario that frightens the management and require specific attention. Moreover, it is important to ensure that the major characters in scenarios deal with specific driving forces or institutions, rather than individuals.
After five or six variations of possible environment’s developments are distinguished, it is recommended to bring most similar together, so that two-three. Then, the detailed descriptions of these two or three scenarios are produced.
Unlike strategic planning, the theory of contingency planning provides for most common plots that are included into scenarios. First of all, scenarios often include considering the winners and losers, as well as possible balance of power, given specific developments (e.g., an increased scarcity of resources). In the so-called “Challenge and response” scenario difficulties are viewed as a business’ chances to learn and develop, and it is envisaged that a business becomes stronger with every new challenge it encounters and successfully counters. The perception of challenge as an opportunity for learning and growth is central for this scenario, as well as the concept of problem-solving. Other scenarios, commonly elaborated by businesses, include the consideration of revolutions (sudden radical shifts in a particular aspect of environment (e.g., technology), cycles and generations (emphasis on the culture of different generations). Importantly, it is suggested that a person, developing a scenario pays special attention to details to be able to recognize, when a scenario starts to take place. It is also important to elaborate on least certain scenarios in case they are concerned with remarkable consequences in light of a certain decision or a direction of a business’ development.
Concluding, it is necessary to mention that “the art of the long view” is highly different from traditional planning. First of all, it uses a different language, allowing one for opening up multiple perspectives and getting prepared for different developments in an external and industry environment. Secondly, the contingency planning framework suggests looking inward to take into account one’s perceptions during the scenario-building. Thirdly, the scope of research, necessary to be conducted in terms of contingency planning is highly different from the one, envisaged in terms of traditional planning. Consequently, the sources of information are also different. Finally, the envisaged ends of considered processes are also different. While traditional planning seeks to develop a single most probable vision of tomorrow, contingency planning focuses on making the best decision under uncertainty.
Works cited
Schwartz, P. The art of the long view: planning for the future in an uncertain world, NY: Currency Doubleday, 1996.Print.
