Beyond Forecasting: Creating New Strategic Narratives
Sarah Kaplan (Rotman School of Management at the University of Toronto) and Wanda Orlikowski
(MIT Sloan School of Management) pp. 23-28
One of the great challenges for organizations in the current economy is making strategy under the
uncertainties posed by turbulent environments, intensified competition, emerging technologies, shifting
customer tastes and regulatory change. Executives often know they must break with the status quo, but
there are few signposts indicating the best way forward.
Executives have long been exhorted to conduct analyses of internal and external environments and
construct scenarios of the future. However, seeing strategy in this way has some serious weaknesses. It
assumes that accuracy can be achieved through rigorous analysis and conscientious efforts to overcome
individual biases in perception. It also assumes that the process will be relatively frictionless and primarily analytical. But research has found that most forecasting efforts fail to attain the desired precision.
To study how managers make strategy in conditions of considerable uncertainty, the authors took an
in-depth look at five technology strategy projects inside the Advanced Technology Strategy Group at a
communications technology company that was experiencing a period of high industry turbulence. The
authors observed managers’ struggles to forecast the future and discovered that managers could not
imagine new futures for the company without rethinking the past and reconsidering present concerns.
A new future could not shape strategic choices unless it was connected in a narrative that showed how
it relates to the past and the present. When managers settled on a particular narrative, they could make
Strategy making amid volatility thus involves constructing and reconstructing strategic narratives
that reimagine the past and present in ways that allow the organization to explore multiple possible
futures. In comparing strategy projects, the authors found that the more work managers do to create
novel strategic narratives, the more likely they are to explore alternatives that break with the status quo.
In other words, to get to an alternative future, you have to create a story about the past that connects to
it. Furthermore, the authors found that to gain traction within an organization, strategic narratives need
to be seen as coherent, plausible and acceptable to most key stakeholders within the company.
Reprint 56107. For ordering information, see page 6.
The Opportunity Paradox
Christopher B. Bingham (Kenan-Flagler Business School), Nathan R. Furr (Brigham Young University)
and Kathleen M. Eisenhardt (Stanford University) pp. 29-35
Capturing new growth opportunities is fundamental to strategy, innovation and entrepreneurship.
These days, experimentation and improvisational change are in. But how should managers address the
challenge? The answer, the authors argue, can be more complex and more crucial to a company’s success
than previously thought. Their research on mature corporations, growing businesses and new ventures
suggests a paradoxical tension between focus and flexibility that can define or break a business. Based
FALL 2014 • Volume 56 • Number 1