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Beyond Forecasting: Creating New Strategic Narratives - Journal Article
One of the great challenges for organizations in the current economy is making strategy under the uncertainties posed by turbulent environments, intensified competition, emerging technologies, shifting customer tastes and regulatory change. Executives often know they must break with the status quo, but there are few signposts indicating the best way forward.
Executives have long been exhorted to conduct analyses of internal and external environments and construct scenarios of the future. However, seeing strategy in this way has some serious weaknesses. It assumes that accuracy can be achieved through rigorous analysis and conscientious efforts to overcome individual biases in perception. It also assumes that the process will be relatively frictionless and primarily analytical. But research has found that most forecasting efforts fail to attain the desired precision.
To study how managers make strategy in conditions of considerable uncertainty, the authors took an in-depth look at five technology strategy projects inside the Advanced Technology Strategy Group at a communications technology company that was experiencing a period of high industry turbulence. The authors observed managers’ struggles to forecast the future and discovered that managers could not imagine new futures for the company without rethinking the past and reconsidering present concerns. A new future could not shape strategic choices unless it was connected in a narrative that showed ho
it relates to the past and the present. When managers settled on a particular narrative, they could make choices.
Strategy making amid volatility thus involves constructing and reconstructing strategic narratives that reimagine the past and present in ways that allow the organization to explore multiple possible futures. In comparing strategy projects, the authors found that the more work managers do to create novel strategic narratives, the more likely they are to explore alternatives that break with the status quo. In other words, to get to an alternative future, you have to create a story about the past that connects to it Furthermore, the authors found that to gain traction within an organization, strategic narratives need to be seen as coherent, plausible and acceptable to most key stakeholders within the company.
Executives have long been exhorted to conduct analyses of internal and external environments and construct scenarios of the future. However, seeing strategy in this way has some serious weaknesses. It assumes that accuracy can be achieved through rigorous analysis and conscientious efforts to overcome individual biases in perception. It also assumes that the process will be relatively frictionless and primarily analytical. But research has found that most forecasting efforts fail to attain the desired precision.
To study how managers make strategy in conditions of considerable uncertainty, the authors took an in-depth look at five technology strategy projects inside the Advanced Technology Strategy Group at a communications technology company that was experiencing a period of high industry turbulence. The authors observed managers’ struggles to forecast the future and discovered that managers could not imagine new futures for the company without rethinking the past and reconsidering present concerns. A new future could not shape strategic choices unless it was connected in a narrative that showed ho
it relates to the past and the present. When managers settled on a particular narrative, they could make choices.
Strategy making amid volatility thus involves constructing and reconstructing strategic narratives that reimagine the past and present in ways that allow the organization to explore multiple possible futures. In comparing strategy projects, the authors found that the more work managers do to create novel strategic narratives, the more likely they are to explore alternatives that break with the status quo. In other words, to get to an alternative future, you have to create a story about the past that connects to it Furthermore, the authors found that to gain traction within an organization, strategic narratives need to be seen as coherent, plausible and acceptable to most key stakeholders within the company.
12 pages, Kindle Edition
Published October 22, 2014
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About the author
Sarah Kaplan
3 books5 followersDistinguished Professor of Gender and the Economy
Professor of Strategic Management
Director, Institute for Gender and the Economy (GATE)
Rotman School of Management, University of Toronto
Sarah Kaplan is Distinguish Professor, Director, Institute for Gender and the Economy, and Professor of Strategic Management at the Rotman School of Management at the University of Toronto. She is a co-author of the bestselling business book, "Creative Destruction" as well as "Survive and Thrive: Winning Against Strategic Threats to Your Business." Her latest book, "The 360° Corporation: From Stakeholder Trade-offs to Transformation" appears in 2019. Her research has covered how organizations participate in and respond to the emergence of new fields and technologies in biotechnology, fiber optics, financial services, nanotechnology and most recently, the field emerging at the nexus of gender and finance. She recently authored “Gender Equality as an Innovation Challenge” (2017) in the Rotman Management Magazine, “The Risky Rhetoric of Female Risk Aversion” (2016) in the Stanford Social Innovation Review, “Meritocracy: From Myth to Reality” in the Rotman Management Magazine (2015), and “The Rise of Gender Capitalism,” in the Stanford Social Innovation Review (2014). Her current work focuses on applying an innovation lens to understanding the challenges for achieving gender equality.
Formerly a professor at the Wharton School, University of Pennsylvania (where she remains a Senior Fellow), and a consultant and innovation specialist for nearly a decade at McKinsey & Company in New York, she completed her doctoral research at the Sloan School of Management at the Massachusetts Institute of Technology (MIT). She has a BA with honors in Political Science from UCLA and an MA in International Relations and International Economics from the School for Advanced International Studies, Johns Hopkins University.
See her twitter at: @sarah_kaplan and @GenderEconomy.
Professor of Strategic Management
Director, Institute for Gender and the Economy (GATE)
Rotman School of Management, University of Toronto
Sarah Kaplan is Distinguish Professor, Director, Institute for Gender and the Economy, and Professor of Strategic Management at the Rotman School of Management at the University of Toronto. She is a co-author of the bestselling business book, "Creative Destruction" as well as "Survive and Thrive: Winning Against Strategic Threats to Your Business." Her latest book, "The 360° Corporation: From Stakeholder Trade-offs to Transformation" appears in 2019. Her research has covered how organizations participate in and respond to the emergence of new fields and technologies in biotechnology, fiber optics, financial services, nanotechnology and most recently, the field emerging at the nexus of gender and finance. She recently authored “Gender Equality as an Innovation Challenge” (2017) in the Rotman Management Magazine, “The Risky Rhetoric of Female Risk Aversion” (2016) in the Stanford Social Innovation Review, “Meritocracy: From Myth to Reality” in the Rotman Management Magazine (2015), and “The Rise of Gender Capitalism,” in the Stanford Social Innovation Review (2014). Her current work focuses on applying an innovation lens to understanding the challenges for achieving gender equality.
Formerly a professor at the Wharton School, University of Pennsylvania (where she remains a Senior Fellow), and a consultant and innovation specialist for nearly a decade at McKinsey & Company in New York, she completed her doctoral research at the Sloan School of Management at the Massachusetts Institute of Technology (MIT). She has a BA with honors in Political Science from UCLA and an MA in International Relations and International Economics from the School for Advanced International Studies, Johns Hopkins University.
See her twitter at: @sarah_kaplan and @GenderEconomy.
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