5.2 The Oxford Scenario Planning Approach

The Oxford Scenario Planning Approach (OSPA) focuses on scenarios and strategic options should something change to an organisation’s status quo, either as immediate issues, or to plan for possible versions of the future.

The OSPA is particularly robust as it ensures that the scenarios created are actually used by the person they are developed for and for the purpose that they were devised. Professor Rafael Ramírez (Professor of Practice, Saïd Business School, University of Oxford) defines scenarios as ‘a small set of manufactured possible future contexts of something for someone for a purpose with a pre-specified use interface [and that is its] actual use’.

In the video below he explains OSPA further.

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Transcript: Video 13 Introduction to Oxford Scenario Planning Approach

RAFAEL RAMÍREZ:

The Oxford Scenario Planning Approach was developed in Oxford by many people since 2003, when I joined Oxford, having left the Shell Scenarios team, where I was a visiting Professor of Scenarios and Corporate Strategy. And it's still evolving as we speak. It's a process of inquiry that lends itself to people who want to learn together about that context that is uncertain.

So, one of the distinguishing features of our approach is that it is centred on people who want to learn more than only make decisions with scenario planning, which other schools of scenario planning are more focused on. So, we focus on the learner. And the approach lends itself to looking at the context, the immediate context of actors with whom the learner works to produce value, whether that value is produced by an NGO or by a scientific field or a city or a government department or an intergovernmental organisation or a company.

We look at how the bigger forces in the context, things like the demographics of China, the rate at which climate change is unfolding, the speed of greater inequality in the world, the debt that Western countries are taking on and financing through QE, and then the rate of inflation and possibly a recession-- all those aspects come together and shape the immediate environment of actors with whom you collaborate to produce value.

And so, the scenarios set the context in which strategy happens. And it is designed for periods such as ours, of very turbulent, unpredictable uncertainty, ambiguity, and novelty. So, it is designed to be adapted and adopted from everything from the IMF to very small NGOs.

So, it's a learning by doing methodology. And there's a lot happening in the field of scenario planning these days, as well as in strategy. And so, every year that we teach the program-- we teach a week-long program for executives in Oxford twice a year-- we change the content 10% to 15% every time because we've learned something didn't work as well as we hoped the previous time. And new things come in and we start a peer-reviewed process. So, we have a reviewer in the classroom acting as a participant, sometimes two reviewers, who give us feedback, and the participants themselves bring us new life cases and new challenges.

So, it's a core learning process of discovery, which we then write up as scholarly articles, often with alumni, often with people that have lent us a life case. And it's almost like being a clinical professor of medicine, where you are, at the same time, teaching, researching, and engaging reality, all at the same time.

The learning that is derived has to fit with the methodology. There are certain things to learn that the methodology would not serve well. But if you want to learn about future contexts that might be different and what opportunities that opens up and what challenges it brings in, that it would be good to prepare for today, rather than leaving it a bit too late, it's a very good methodology for that.

The robustness of the method is that it can be adapted. We do not have a cookie cutter, here are the six steps or nine steps that you have to do. We have focused on the methodology and the theoretical principles, epistemological principles, ontological assumptions that the methodology articulates. But we're quite open as to whether you do this in six months with 200 people or in six weeks with 20, as long as you fit the principles of the methodology. And so, it's robust in the sense that it's very adaptable. It's robust in the sense that it has been proven by many people to be useful in learning about the context and in opening up new possibilities, particularly in business terms, top-line growth possibilities, not only things that could go wrong and new risks to attend to.

It's also robust in the sense that the methodology is quite easy to understand in principle. Mastering the details of that takes some time, as does everything. Learning to play tennis or play golf is no different than that. But the principles are very easy to understand. And so, if you go to the board of an organisation or to a CEO and they give you five minutes to explain it, it's quite easy to explain.

People often ask, how do I bring this methodology to my organisation? How do I get approval from my boss or my boss's boss to do it? And the easy answer to that is that your boss and your boss's boss and so on, they're already doing scenario planning. They're already making assumptions about the context they're in, except that they're not paying attention to what they're doing. And they're, in all probability, doing it quite badly because they're not paying attention too.

So, if you do a figure-ground reversal and say, instead of spending 90% of the intent on the plan and 10% maybe on the context of the plan, let's spend 50% on the context of the plan, or even 80% on the context of the plan and make sure that this is correct. And so, the learning is that you have rehearsed the future, even if a different future arrives. And we had rehearsed how we would leave the route we were on and start exploring and developing alternatives for the new one. And we were much more agile and responded a lot faster than would have been the case had we not done the scenario planning.

So, it is helpful for being more open to alternatives for looking at, if there's a disagreement between two factions in your team, maybe saying, well, team A is maybe making assumptions about the future that are A, and team B is making assumptions about the future that are B. Under what circumstances might team B be right and team A wrong and vice versa? So, it's more about inquiring and understanding each other's perspectives, rather than reaching agreement too fast on some sort of common denominator that tends to be shallow and unquestioned.

My colleague, Trudi Lang, here at Oxford, and I wrote something about the lily pond effect in Oxford Answers-- you can look it up online-- where when you have situations like we have had with the pandemic, where it starts slow and then it accelerates very quickly, or inflation at the moment, governments and others tend to react a bit slow at the beginning because it's slow-moving and then react too late once the thing has sped up. And so imagining change that is in that logarithmic sense rather than a linear mode, which is the way most change management programs implicitly assume change will continue and acting early to stop or slow down things or delay things to prepare for that speeding up second phase of the growth is something that is extremely valuable, both economically and in terms of the attention you give to particular aspects. You're not going to burn out pursuing something late that you should have attended to early.

TUNA we came up-- my co-author, Angela Wilkinson, who's now head of the World Energy Council, she was here at Oxford at the time. She and I came up with the acronym TUNA, for Turbulent, Unpredictably Uncertain, Novel, and Ambiguous conditions because we found that to be better in social science terms, more rigorous than the VUCA, Volatile, Uncertain, Complex, Ambiguous acronym, which I understand the US Army came up with and spread all around the world. And volatility tends to be something that people put a number to before they think it through.

And the methodology we have is qualitative first and quantitative afterwards, whereas VUCA tends to be quantitative first and then maybe a bit qualitative. And we find that often when you put a number, particularly a percentage, in front of somebody, they stop thinking, whereas our methodology is to get them to think more, think further, and think again. So, we found TUNA to be more helpful as an acronym for the conditions that this methodology is pertinent to than the VUCA.

Back in 1993, my late colleague, Richard Normann, and I published a paper in the Harvard Business Review called "Designing Interactive Strategy," which was an attack on the value chain. And it became, and still is, I think, my most cited article. And one of the cases that we used to explain this notion of interactive strategy was IKEA, the Swedish manufacturer of parts for furniture, which you assemble in your bedroom or your living room or your dining room or your kitchen. Where us, the client, is, in fact, treated as a supplier of labour, and many of the suppliers of parts by IKEA are treated as customers of IKEA services-- for example, purchasing in bulk so that they can purchase at the lowest price, rather than whatever they could do internally.

And so, the idea was that strategy, certainly in service businesses, involves many parties coming together, orchestrated by somebody, in this case, IKEA, to each do its part to help each other create value. And so, when applied to scenario planning, it means that if you come together in the immediate transactional environment, those parties with whom you transact and you do business with, whether business is for profit or value creating in the public domain, not for profit, or an NGO, when you come together, you can do so to jointly stabilise the field in which you're in.

End transcript: Video 13 Introduction to Oxford Scenario Planning Approach

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Video 13 Introduction to Oxford Scenario Planning Approach

In the video, Professor Rafael Ramírez refers to TUNA conditions – Turbulence, Uncertainty, Novelty (& unique) and Ambiguity. This may help to reframe scenarios as a social process in times of uncertainty, in order to consider and search for new ways to survive and succeed. Figure 21 provides more information.

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Figure 21 The OSPA as a social process (Source: Adapted from Ramírez and Wilkinson, 2016)

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Figure shows the OSPA as a social process. At the top of the figure is What, and bottom How. There are three interconnected circles, in the top circle are the TUNA conditions in boxes – Box 1 - Acknowledge framing contests. Box 2 - Design and manage safe transitional space. Box 3 - Attend to time as socially constructed and cultural. Box 4 - Host multiple framing and accept disagreements. There is then an arrow to two boxes with following text. Box 1 – Enable disagreements to become productive assets, box 2 – Open up/surface locked-in organisational or professional framing. In the circle to the left there are two boxes. Box 1 – Co produce plausibility with systems maps – state domains and stories, relating both to each other. Box 2 – Consistency scenarios and models. There is then a cloud image with text – Join gentle reperception from sensemaking by co-producing different frames. Then in right hand circle two boxes. Box 1 – Contrast the scenarios with each other, Box 2 – Co-produce memorability and communicability with stories – Time domains.

Figure 21 The OSPA as a social process (Source: Adapted from Ramírez and Wilkinson, 2016)

In the next section we focus on Islands in the Sky, created by Dr Matt Finch, and how it draws on elements of OSPA, to provide a simplified approach to enable teams and organisations to carry out rapid scenario planning – as was required during the height of the COVID-19 pandemic in 2020 – when organisations were dealing with continual uncertainty. The approach offers a framework for those less familiar with futures and scenario planning to engage with different approaches, feel comfortable planning for the unknown, and consider future possibilities.