How to Make Scenario Planning Stick
Paul J.H. Schoemaker and Shardul S. Phadnis
Key Insight: Companies are better able to respond to rising uncertainty when they combine scenario planning with other strategic practices.
Top Takeaways: Scenario planning is a valuable tool for managing uncertainty in an organization, but its impact can be limited if the insights it generates fail to gain traction. Two experts explain how to better manage scenario planning and help it take root in large enterprises by linking it to complementary practices. They propose a conceptual model consisting of three scenario-planning phases supported by three crucial organizational capabilities that help connect all the pieces.
Assess What Is Certain in a Sea of Unknowns
Cynthia Selin
Key Insight: Leaders engaging in scenario planning can better envision potential futures by first identifying what won’t change.
Top Takeaways: Developing strategy in an uncertain environment requires both anticipating what may change and recognizing what will remain constant. When leaders are engaged in scenario-planning activities, identifying the different kinds of constraints that shape the future — physical, temporal, institutional, political, and cultural — can help them ground and focus their thinking about what is amenable to change. A framework that outlines five types of certainties can inform organizations’ strategic-planning efforts.
A Faster Way to Build Future Scenarios
Rafael Ramírez, Trudi Lang, Joakim Köhler, and Matt Mennell
Key Insight: Scenario planning that focuses on surfacing leaders’ unacknowledged assumptions and is aided by AI can yield useful insights faster than traditional methods.
Top Takeaways: Scenario planning is an invaluable tool for helping managers navigate uncertain business contexts. But the ways in which large organizations typically develop sets of scenarios are expensive and time-consuming and don’t deliver insights quickly enough. A streamlined planning process that frames scenarios around the needs of the people who will use them reveals unexamined strategic assumptions and uses generative AI to iteratively create new scenarios that can yield useful insights more rapidly.
Broadening Future Perspectives at the Bank of England
Jacqueline Koay, John Lewis, Julia Giese, and Melissa Davey
Key Insight: The U.K.’s central bank is bridging narrative and quantitative cultures to extend and enhance its horizon-scanning practice across the organization.
Top Takeaways: Leaders at centuries-old Bank of England recognized the need to broaden their approach to managing risk in the face of new threats, such as algorithmic trading and cyberattacks. To grow the practice of long-term horizon scanning, however, they had to persuade employees in a highly quantitative risk management culture to see the strategic value of creative storytelling. Employees involved in the work explain how they introduced a new way of thinking about risk that uses plausible and strategically relevant scenario narratives to challenge people’s assumptions and inform decision-making.
Are You an Authentic Leader or an Authentic Jerk?
Hannes Leroy, Michael A. Daniels, Kristin L. Cullen-Lester, and Alexandra Gerbasi
Key Insight: To lead with authenticity, stay grounded in your deeply held values, cultivate self-awareness — and quiet your ego.
Top Takeaways: Being your “authentic self” can undermine leadership effectiveness if it’s fueled by ego. Evidence drawn from years of collective research shows that a lived commitment to personal values is the hallmark of the type of authentic leadership that can successfully bring teams together in pursuit of positive change. Leaders can learn to practice humble authenticity by owning, managing, developing, and sustaining their values.
How Nesting Changes Platform Strategy
Elizabeth J. Altman, Mary Tripsas, Tommaso Buganza, and Daniel Trabucchi
Key Insight: When platform businesses opt to host or embed themselves into another platform, new opportunities — as well as strategic risks — emerge.
Top Takeaways: By nesting, when platform businesses allow other platforms to embed within their own, or they offer their own services on a host platform, companies can gain access to new markets and customers and improve their current users’ experience. But platform owners must also consider whether such a partnership will affect the integrity of their brand and how it might affect customer relationships. Interviews with executives of both host and nested platform companies yield insights that can help guide leaders through the strategic implications of nesting decisions.
The Perils of Algorithmic Pricing
Chris K. Anderson and Fredrik Ødegaard
Key Insight: Businesses that use algorithm-based revenue management systems need to understand and minimize their potential legal exposure.
Top Takeaways: Several recent class-action antitrust lawsuits allege that sharing an algorithm to set prices for airfare, hotel stays, or other purchases is implicit collusion. Federal regulators have weighed in to support the assertion that these systems can lead to unintended collusion and antitrust violations, even without explicit agreements among the parties using them. Businesses can reduce the risk of a law violation with algorithms that rely on decentralized decision-making and use only publicly available data.
The Three Obstacles Slowing Responsible AI
Öykü Işık and Ankita Goswami
Key Insight: Accountability, strategy, and resource challenges can hamper the responsible development and use of AI — but they can be overcome.
Top Takeaways: Many organizations intend to check their AI systems for fairness, accountability, and transparency, but a lack of commitment or structural or cultural obstacles gets in the way. Failing to follow through can result in biased outcomes, outputs that aren’t interpretable or explainable, or angry stakeholders. Researchers have identified five strategies that can help organizations get their responsible AI efforts on track: structuring ownership at the project level, hardwiring ethics into everyday procedures, aligning ethical risk with business risk, rewarding responsible behavior, and practicing ethical judgment, not just compliance.
The Case for Quiet Corporate Activism
Julia Binder and Heather Cairns-Lee
Key Insight: Leaders can sustain their commitments to social causes in a hostile political climate by reframing communications and keeping them low-key.
Top Takeaways: Support for social causes, once widely regarded as a sign of strong leadership, has become a potential business risk. Some companies have chosen to maintain their public stances while others have backed away from earlier commitments. But there is another option: engaging in quiet corporate activism, a strategic, low-profile approach to sustaining social commitments and avoiding potential backlash. Five strategies for engaging in quiet corporate activism can help leaders keep advancing purpose-driven agendas amid pressure to halt such efforts.
Integrate Sustainability and Innovation to Find New Opportunities
Ivanka Visnjic, Felipe Monteiro, Michael Tushman, and Ernesto Ciorra
Key Insight: Leaders can boost product innovation by reframing sustainability as a growth opportunity rather than a compliance issue.
Top Takeaways: Companies often see sustainability as a regulatory burden that constrains new product development. New research shows how some organizations have harnessed sustainability efforts as engines for growth by forming collaborative partnerships, connecting their sustainability initiatives to transformative innovation practices, and engaging with both internal and external stakeholders on a collective goal. Global companies like BYD, Enel, and OCP Group serve as examples of how organizations can successfully drive innovation in tandem with sustainability efforts.