EXPERTISE IN TECHNOLOGY AND ECONOMIC

www.tbrc.fi

April 4, 2006

Jukka BergmanTBRC

Time horizon of knowledge developing new product concepts

Not proven

Well understood

Available

Technology uncertainty

Proven

Defining concept

development

Solving concept development

>10 years 5-10 years 2-5 years 1-2 years

Required availability

Visioning concept

development

Emerging concept

development

(Tutti/Masina tutkimusprojekti, Leppimäki et al., 2004)

April 4, 2006

Jukka BergmanTBRC

Dynamic Business Environment

As Mintzberg (1978) has stated that innovations and strategies can develop with or without organizational intent.

Strategic intent Planned strategy

Realized

strategy

Emerging

strategy

Emerging

strategy

April 4, 2006

Jukka BergmanTBRC

The Competence Gap

Vision

Position of the Company

What business are we in? Strategy

Compe

tenc

e Gap

(Rönkkö, 2005)

April 4, 2006

Jukka BergmanTBRC

Introduction of Scenarios

Future research methods can be divided into quantitative / qualitative and exploratory / normative techniques.

Scenario method is seen as a qualitative and exploratory technique, but the scenarios can be either explorative or normative.

Scenario method is traditionally considered as a strategy formation tool

Scenarios are logical and plausible descriptions about the future development

April 4, 2006

Jukka BergmanTBRC

Scenario approach

The fundamental idea:

• To provide a structured way to create a dynamic interaction between the environment and the organization

Scenarios enables:

• Management of collaborative networking process

• Analysis the past and present environment

• Strategic conversation

• To challenge the present assumptions and mental maps

• Determination of the determinants of the future “driving forces”

• Recognition and evaluation of future opportunities

• Creation of new knowledge

April 4, 2006

Jukka BergmanTBRC

Purpose of scenarios

Van der Heijden 2004

To understand the environment

to reveal important question/issues needed to research

To create superior strategy

No learning and difficult to sustain success

To understand the ongoing changing environment

To create quality to strategic conversation

Adaptive learning

Continuous enhancing of competitive performance motivates to engage in new actions

April 4, 2006

Jukka BergmanTBRC

Scenario process

Phase 1. Phase 2. Phase 4. Phase 3.

Environmental Environmental analysisanalysis

Weak signals

(mega)trends

Business environment (PESTE analysis)

Stakeholders

Scenario 1

Scenario 2

Scenario 3

Scenario 4

Sc

ena

rio

pro

ces

sS

cen

ari

o p

roc

ess

VisionVision

Str

ate

gy

fo

rma

tio

nS

tra

teg

y f

orm

ati

on

April 4, 2006

Jukka BergmanTBRC

Future anticipation process

PE

ST

E

Delphi-analysis

Technologyroadmap

INFORMATION COLLECTION

INFORMATION PROCESSING

Futures table

STRUCTURING ALTERNATIVE

FUTURES

time

businesspotential

Scenario working

Futures table

SELECTING/ EVALUATING ALTERNATIVE

FUTURES

Strategy working

Alternative courcesof action

time

businesspotential

Time-seriesanalysis

Trend analysis

Cross-impactanalysis

PE

ST

E

PE

ST

E

Delphi-analysis

Technologyroadmap

INFORMATION COLLECTION

INFORMATION PROCESSING

Futures table

STRUCTURING ALTERNATIVE

FUTURES

time

businesspotential

time

businesspotential

time

businesspotential

Scenario working

Futures table

SELECTING/ EVALUATING ALTERNATIVE

FUTURES

Strategy working

Alternative courcesof action

time

businesspotential

Time-seriesanalysis

Trend analysis

Cross-impactanalysis

(Leppimäki et al. 2003)

Klikkaa kuvaa Tutu-taul.

April 4, 2006

Jukka BergmanTBRC

SCENARIO PROCESS

Scenario approaches can be classified into 1. intuitive (Schwartz, Wack, SRI)

2. heuristic (van der Heijden, Schoemaker, Meristö)

3. statistic models (Godet).

Analysis of gathered knowledge and

knowledge creation (externalization)

Implementation of scenarios and learning

(internalization)

Creation of scenarios (combination of

knowledge)

Definition of the focus of business environment

(socialization)

April 4, 2006

Jukka BergmanTBRC

Scenario approaches

Schwartz van der Heijden Schoemaker Masini Godet

1. Exploration of a strategic issue

1. Structuring of the scenario process

1. Framing the scope 1. Description of the process

1. Delimitation of the context

2. Identification of actors & stakeholders

2. Delimitation of the context

2. Identification of the key variables

2. Identification of external key forces

2. Exploring the context of the issue

3. Exploring the predetermined elements

3. Identification of the variables

3. Analysis of past trends and actors

3. Exploring the past trends

4. Identification of Uncertainties

4. Identification of the key variables

4. Analysis of the interaction of actors and the environment

4. Evaluation of the environmental forces

5. Construction of initial scenarios

5. Identification of the uncertainties

5. Creation of the logic of initial scenarios

3. Developing the scenarios

6. Assessment the initial scenarios

6. Identification of actors

5. Creation of the environmental scenarios

6. Creation of final scenarios

4. Stakeholder analysis 7. Creation of the final learning scenarios

7. Formulation of hypothetical questions

6. Building the final scenarios

5. System check, evaluation

8. Evaluation of the stakeholders

8. Building the scenarios

7. Implications for the decision making

8. Follow-up research

6. Action planning 9. Action planning

10. Reassessment of the scenarios and decision making

9. Implementation and action planning

7. Identification of strategic options

8. Action planning

April 4, 2006

Jukka BergmanTBRC

References

Godet, M. (2000): The art of scenarios and strategic planning: Tools and Pitfalls, Technological forecasting and social change, 65, 3-22.

Godet, M. & Roubelat, F. (1996): Creating the future: The use and misuse of scenarios, Long Rang Planning, 29, 2, 164-171.

Jääskö & Keinonen (Eds.) (2004): Tuotekonseptointi, Teknologiainfo, Teknova Oy. Isbn: 951-817-832-1

Makridakis, S., Wheelwright, S.C., McGee, V.E. (1983). Forecasting: Methods and applications. New York, John Wiley & Sons, Inc.

Schoemaker, P. J. H. (1991): When and how to use scenario planning: A heuristic approach with illustration, Journal of forecasting, 10, 549-564.

Schwartz, P. (1996): The Art of the Long View - Planning for the Future in an Uncertain World Doubleday Dell publishing Inc., New York, USA.

van der Heijden, K., Bradfield, R. , George, B., Cairns, G. & Wright, G. (2002): The Sixth Sense - Accelerating Organizational Learning with Scenarios John Wiley & Sons, Ltd., Chinchester, UK.

Wack, P. (1985a): Scenarios uncharted waters ahead, Harvard Business Review, Sept-Oct, 73-89.

Wack, P. (1985b): Scenarios: shooting the rapids, Harvard Business Review, Nov-Dec, 139-150.