Overconfidence can derail a strategic planning process. It can cause smart people to assume they know more than they do. It can lead groups of people to confidently predict a future when the future is uncertain. It can make a strategy a narrowly focused agenda instead of a map of strategic options for thriving in an uncertain environment.
Roch Parayre, Ph.D. gives some famous examples of overconfidence.
Strategic planning has the potential to help an organization anticipate and thrive in uncertain environments. However, this potential can only be realized if the planning is done in a way that counteracts the cognitive biases of participants. Such tendencies as overconfidence, over-reliance on trends, a desire for certainty, and groupthink can cause a strategic planning session to end with less than optimal results.
Any successful strategic planning process ought to prompt participants to see differently. If it does not do this, the strategic planning does little but reinforce current beliefs and is a waste of time.
Dr. Roch Parayre illustrates this point using the example of Encyclopedia Brittanica.
Strategic planning is only useful to the extent it drives behavior and helps an organization better prepare for the future. Dr. Paul Schoemaker discusses how companies put to use the results of scenario planning processes.
For more on scenario planning see:
1. Scenario planning in finance
2. Implementing scenario planning in your organization
3. Interesting output from 1997 scenario planning exercise
Scenario planning offers a disciplined way to generate valuable, creative new paths for your company. Dr. Paul Schoemaker describes the scenario planning process in the following video.
In this video, Dr. Paul Schoemaker describes a strategic planning process that focuses on anticipating multiple futures rather than attempting to do the impossible and predict the future.
For more on scenario planning see:
1. Scenario planning in finance
2. Implementing scenario planning in your organization
3. Interesting output from 1997 scenario planning exercise
