Towards the integration of system modelling with scenario planning to support strategy: the case of the UK energy industry

Abstract

A key aspect of strategy is sense-making of the unfolding uncertainty in the business environment and responding appropriately to achieve organisational objectives. However, uncertainty means that there is more than one future open to an organisation. Sense-making is therefore problematic. Scenario planning is one approach to sense-making that helps to explore and understand uncertainty, aiming for the identification of potential predetermined elements in the business environment. In this paper we propose the integration of systems modelling with scenario planning to support the exploration of uncertainty, identify knowledge gaps that set a (subsequent) research agenda, understand the role and usefulness of historical data, and model research outcomes to help reveal potential predetermined elements. Specifically, scenario planning identifies potential predetermined elements in the business environment; system modelling in the form of behaviour-over-time graphs, causal mapping and feedback loops helps in structuring and linking variables and their interaction to provide an understanding of the systemic drivers of these predetermined elements. Methodological integration of this type enhances modellers’ ability to support strategy in organisations.

Keywords:

• scenario planning
• facilitated modelling
• causal mapping
• systemic drivers of change
• predetermined elements

Acknowledgements

The author would like to thank the two reviewers for their considered, constructive and helpful review of the paper. The author would also like to thank Kees van der Heijden, Fran Ackermann, John Sillince and Paul Hibbert for their constructive comments on earlier drafts of the paper.