Chapter 10

Scenario Planning for Disruptive Technologies
This chapter uses scenario planning to help incumbents prepare for the future of their emerging technologies. This type of planning can help firms prepare the corporate mindset to recognize opportunities faster than rivals.

Scenarios address three challenges inherent in emerging technologies:
Uncertainty – the central element of the process
Complexity – explores how diverse forces influence each other over time
Paradigm shift – challenges he prevailing mindset to see things anew

Scenario planning simplifies data into a limited number of possible scenarios and goes a detailed and realistic narrative to direct attention to aspect otherwise overlooked. It is different from other planning because it goes beyond objective analysis, looks at many possibilities changing multiple variables at a time. In essence, scenario planning paints a concrete and vivid narrative of the future that hinges on key uncertainties with outcomes that will shape the future environment.

This type of planning is a good tool for emerging technologies because it allows firms to examine the interaction between technology and market that shapes the emergence of technologies. It can also help enhance budget and resource allocations processes in firms and help managers understand the commercial potential of an emerging technology. Lastly, this type of planning can help amplify and analyze weak signals.

There are 10 steps to constructing scenarios:

1. Define the issues you want to understand better in terms of time, scope, and variables. Be sure that the scope of the scenarios is broader than the industry, products, customers, and technologies that define your business.
2. Identify the major stakeholders or actors who would have an interest in these issues or who may be affected by it and those who could influence matters.
3. Identify and study the main forces that are shaping the future within the scope of the issues and make sure they cover the social, technological, economic, environmental, and political domains.
4. Identify trends or predetermined elements that will affect the issues of interest from the list of main forces.
5. Identify key uncertainties from the list of main forces.
6. Select two of the most important of the key uncertainties.
7. Assess the internal consistency and plausibility of the initial learning scenarios. Make sure they are internally consistent by asking:

• Are the trends mutually consistent with each other?
• Can the outcomes for the various uncertainties co-exist?
• Are the actions of stakeholders compatible with their interests?

8. Assess the revised scenarios in terms of how the key stakeholders might behave in them
9. Conduct additional research and reexamine the internal consistencies of the learning scenarios and decided if the more complex interactions should be applied with a quantitative model.
10. Reassess the uncertainty ranges of the main variables of interest and show how each variable looks under different scenarios.

The last part of the chapter goes over common traps in scenario planning that firms should avoid:

• Failing to get top management buy-in
• Lack of diverse inputs
• Failure to stimulate the strategic options
• Not tracking the scenarios via signposts
  

Update:

Knight Ridder actually did successfully get into web products by investing in a range of online services including CareerBuilder, cars.com, and Real Cities. In March 2005 the company acquired a 25% stake in Topix.net, which is a news aggregator and distributor offering news categorized by topic and geographic location. Unfortunatly, in McClatchy company bought out Knight Ridder. Today, USA today is actually the most circulated paper (as of 2006) and the New York Times is the most accessed newspaper (last month). What is interesting is that the New York Times is also in the top five most circulated papers.