Using Futures Research Techniques in Strategic Planning: A Simulation

James L. Morrison and Robert G. Cope

(reprinted from Morrison, J. L. , & Cope, R. G. (1985). Using futures research techniques in strategic planning: A simulation. Planning for Higher Education, 13(2), 5-9. )

Strategic planning is now recognized as an improved form of college and university planning (Keller, 1983; Mason, 1984). In comparison to long range planning, strategic planning places more emphasis on the environment, the openness of boundaries, and the interplay with other organizations. Strategic planning also has given more emphasis to the gestalt and the concurrent pulling together of soft and hard data to arrive at major directional decisions that contain elements of timing, tone, texture, emphasis, rhythm, and contrast. Strategic planning is usually characterized as outside-in planning. What could happen "out there" in the future is a key element in strategic formulations.

The concept of strategic planning is relatively simple (see Figure 1). An organization has a mission or purpose. It resides in an "environment" which presents opportunities and threats. It has distinctive strengths and some weaknesses. Strategic choices are made continually to adjust how the organization, given its mission, strengths and weaknesses, responds to anticipated changes in its environment. And that is where the simplicity ends.

For example, doing a systematic environmental analysis requires a "technology." Mission analysis and organizational analysis are complex (Cope, 1981), as is integrating mission review with environmental scanning (Cope, 1984). However, there are several relatively simple techniques developed in the futures research community that may be used to enhance our ability to conduct an elementary environment analysis as part of the strategic planning process. The purpose of this paper is to describe how 33 participants attending a six hour futures and strategic planning preconference workshop at SCUP-19 did an environmental scan to identify a number of issues facing higher education and then proceeded through several exercises designed to rank and evaluate these issues.

The Hyatt Regency College: A Simulation

We formed the participants of our workshop into working groups, each representing the planning committee of Hyatt Regency College (HRC). Each member of the group was assigned a role on this committee, e. g. , Provost, Dean of the School of Arts and Sciences, Dean of the School of Education, Dean of the School of Business, Dean of Student Affairs, Director of Institutional Research, Chair of the HRC Faculty Senate and the Director/Assistant to the President for Planning.

For the purpose of the simulation, HRC was assumed to be a co-educational, independent institution of 2500 students in Cambridge, Massachusetts. It consisted of three bacculaureate degree granting schools (liberal arts, business, and education), with one school (education) also granting a master's degree.

We explained that during the next three to four hours we would simulate an environmental scan to identify trends or issues facing American higher education in general, and then proceed through an exercise where we would evaluate and rank these issues, and explore their implications for strategic planning in HRC.

The Environmental Scan

As described by Renfro and Morrison (1983), one method of establishing an environmental scanning activity is to have either the chair/coordinator of the planning committee or an outside consultant interview each member of the planning committee anonymously as to their perception of the most salient issues facing the institution. These issues would be presented to the group as a whole, and ensuing discussion would identify additional issues.

Given that we did not have time to interview each member of the HRC planning committee, we began our exercise by asking each work group to brainstorm a list of issues and/or trends which could affect higher education in general and HRC in particular. Among the economic issues and trends identified in this initial scan were increased inflation and concomitant increases in the cost of education, loss of federal support, a rapidly changing occupational structure, increased unionization of faculty, increased competition from corporate and proprietary schools, and increased competition of public and independent schools for public support. This latter trend, of course, was viewed as resulting in part, at least, from a projected decrease in the 18-24 year old age cohort by 1990.

Other social/demographic trends identified were the aging society (and college faculties), an increase of the proportion of minorities in the American population and concomitant change in the age/sex/ minority composition of student bodies, a continuing decrease in the quality of high school graduates, a national concern for accountability, a decrease in public support for education, particularly liberal arts education, increasing affirmative action pressures, an increasingly litigious society, and increasing rifts between faculty and administration. Technological trends noted included the increasing reliance on telecommunications and computers for instruction and administration. Political/legislative/regulatory trends noted included increased regulatory control from legislatures and from accrediting associations.

Before proceeding to the issues evaluation/ ranking stage, we noted that the list of issues developed by the work groups could constitute the basis for establishing a scanning taxonomy for HRC. That is, each member of the committee would be assigned certain information resources to scan in order to provide documentation of the direction and intensity of issues or trends identified in the taxonomy. Of course, if such a scan identified new issues or trends, the committee could include the new issues in the taxonomy. The utility, of course, in having major decision makers on the planning/scanning committee is that the members of the committee begin to view each item of information with the question, "What does this mean for my institution?"

Ranking Issues. In "real life," an environmental scanning activity would produce somewhere between 70-120 issues or trends which offer threats or opportunities to the institution. This is too large a number to handle within a short time frame. There are several techniques which may be used to rank and prioritize the issues. In our workshop we used two techniques. First, we arbitrarily selected five issues or trends identified by each work group. We then asked that they independently and anonymously evaluate the importance of each issue or trend on a scale of 1 to 10. The group recorder then added the resulting scores for each issue. This technique led to an initial group assessment of ranking the selected issues vis-a-vis each other. It also identified variance in individual opinion with respect to the importance of each issue, i. e., some individuals evaluated an issue low in importance and others evaluated it high. This led to a discussion of the reasoning undergirding the variance in scores. It was stressed that the analysis of discrepancies should begin with the question, "Can anyone on the committee explain why issue 'x' would receive a '2'?" The importance of this protocol was to focus attention on the issue, and not connect this attention with any one personality.

Such discussions led to redefinition/clarification of the issue, for as often happens, some committee members may not initially have the same interpretation of the definition of the issue. Or there could be genuine disagreement over the importance of the issue. In any event, the data presented serve to stimulate important discussion vis-a-vis the issues.

When the discussion ran its course, another evaluation of the issues occurred. In some cases, the rank ordering of perceived importance changed, or a bimodal distribution of responses became more apparent. In any event, the two-round Delphi of evaluating issues served to highlight the most important issues facing Hyatt Regency College.

The Probability-Impact Chart

Another technique to evaluate and rank issues is the probability-impact chart. This chart requires that the committee first estimates the probability that an issue emerges, or that a trend will reach a certain level during some future time period, say within five or ten years. Next, assuming that the issue emerges, or that a trend reaches a certain level, the committee must assess the degree of positive and the degree of negative impact on the institution. This requires that each individual ask the question, "What is the degree of positive impact of this event on my institution?" and "What is the degree of negative impact of this event on my institution?"

Estimating the probability that an event will emerge may be relatively straightforward. If the scanning process has identified a particular event (that is, something that will happen or not happen in such a way that it can easily be verified). For example, the United States replaces the current income tax system with a flat tax. This sharp, clearly defined, verifiable event is one in which, while opinions may differ, the question being asked is clear. If, on the other hand, the scanning process identifies a broader issue that does not have this specific event focus, it may be difficult to define when an issue has emerged and when it has yet to emerge. In essence, an issue emerges when it is recognized by a broader and broader spectrum of the society and, in particular, by those whom it will affect.

The next questions concern evaluating the positive and negative impacts of the emerging issue or event on the assumption that it actually does occur. Morrison, Renfro, and Boucher (1984) advocate using a scale such as zero to ten to provide a range for the answers to this question where zero is no impact, five is moderate impact, and ten is severe impact. This question and the probability impact question can be combined in a single chart that displays a probability impact space with positive and negative impacts on the vertical axis and probability from zero to one hundred on the horizontal axis. This chart can be used as a questionnaire in which the respondents record their answer to the probability and impact questions by placing a mark on the chart with the coordinates of their opinion about the probability and impact of the issue. When all of the participants have expressed their opinions, all of the votes can be transferred to a single chart to show group opinion. A sample chart with group opinions is shown in Figure 2. Note that respondents differ in their degree of consensus vis-a-vis their perception of the positive and the negative prospects of this event. That is, there is relatively good consensus about the positive impact, whereas there appears to be no consensus about the negative impact. In this case it may be useful to return the group opinion to the individual participants for further discussion and reevaluation of the issue. This process of anonymous voting with structured feedback is known as Delphi. Anonymity can be extremely useful. For example, in one study, all of the participants in the project publicly supported the need to adopt a particular policy for the organization. But when asked to evaluate this policy on the probability-impact chart anonymously, the respondents indicated that though they believe the policy was likely to be adopted, they did not expect it to have any significant impact. This discovery allowed the decision makers to avoid the risks and costs of a new policy which was almost certain to fail.

When repeated reevaluations and discussions do not produce sufficient consensus, it may be necessary to redefine the question to evaluate the impact on particular subcategories of the institution, such as impact on personnel, or finance, or curriculum, or faculty, etc. As with all of today's judgmental forecasting techniques, the purpose here is both to produce useful substantive information about the future and to arrive at a greater understanding of the context, setting, and framework of the evolving future.

The most popular method of interpreting the result of a probability impact chart is to calculate the weighted importance-both positive and negative for each event. This is the product of the average probability and the average importance. The events, issues, and trends are then ranked according to this product, i. e. , their weight importance. Thus, the event ranked as number one is that with the highest combined probability and impact. The other events are listed in descending priority according to their weighted importance.

Ranking the issues according to weights calculated in this manner implicitly assumes that the item identified in the scanning is indeed an emerging issue -that is, one which has an element of surprise. If all of the items identified in scanning are new and emerging and portend this element of surprise (that is, they are unknown to the educational community or, at least, to the community of the institution now and will remain that way until they emerge with surprise and the potential for upset), then the strategic planning process would do well to focus on those that are most likely to do this and to have the greatest impact.

If, however, the issues are not surprises, then another system of evaluating, ranking, and prioritizing the events and issues will be necessary. For example, if the entire community knows of a particular event and expects that it will not happen, then this low event probability will produce a low event priority. Yet, if the event would in fact occur, then it would be of great importance. The surprise then is in the occurrence of the unexpected. The key here is the upset expectation. It may be just as much of an upset if an item that everyone expects to occur does not in fact happen. Thus, the evaluation of a probability-impact chart depends on another dimension-that is, one of expectation and awareness. The probability impact chart is used with a series of events that are known to the community. The most important might be those of high impact and high uncertainty, that is, those centered around the 50% line. These are the events that are as likely as not to occur and portend an element of surprise for some portion of the community when they happen or do not happen. Morrison, Renfro, and Boucher (1984) note that emerging issues, events, and trends that are ranked according to their weighted importance have a built-in assumption that should usually be challenged -that is, the ranking assumes that the administrators and the institution will be equally effective in addressing all of these issues. This assumption is almost certainly false, and, at the same time, seldom of great importance. Suppose that the top priority issue is one on which the institution could have little influence and, then, only at great cost. If a lower level item, one on which the institution could have a significant impact with a small investment of its resources, it would clearly be foolish to squander great resources for little advantage, when great advantage could be obtained for a much smaller investment of these resources. Thus, in addition to the estimation of the weighted importance, an evaluation needs to be made of the extent to which ' the event might respond to institutional actions of various costs and difficulty. The cost-effectiveness ratio measures the relative efficiency of alternative institutional actions; actions which are expressions of strategy. This is especially evident where the ratio differences are small. However, if the emerging issues are competing for the same resources, the effectiveness response ratios will be essential in guiding the effective use of the institution's limited resources.

Using the techniques described above, each HRC planning committee ranked five issues identified by the workshop directors, again using the two round Delphi method. The specific issue events which were identified as first priority were that by l 990: 1) HRC would have a 700 SAT average; 2) the percent of 18-year-olds in Massachusetts would decline by 40%; 3) that 40% of all business school graduates will be accountants; 4) that there will be a 30% decline in liberal arts majors; and 5) that 80% of all information sources will be electronic.

Impact Network

The next step in our workshop was an issues analysis using the impact network techniques. The impact network method was derived from the concept of "relevance trees," which are essentially a graphical presentation of an outline of a complete analysis of an issue. An impact network is a brain-storming technique designed to identify potential impacts of key events on future developments.  An impact network is generated by identifying the possible effects of a given specific event. Such an event might be "tenure is abolished" or "Federally-sponsored Student Financial Aid is cut in half," or "all professors must be certified to teach in colleges and universities. " When the candidate issue has been selected and sharpened into a brief, clear statement, the group concerned with the issue is ready to begin to form the impact network. The procedure is quite simple.  Any impact that is likely to result from the event, whether negative or positive, is an "acceptable impact. " The question is not probability, but possibility.  With the initial event written in the middle of the page, each first-order impact is linked to the initial event by a single line.  When five or six first-order impacts have been identified or when the space around the initial event is occupied, the process is repeated for each of the first-order impacts.  Again, the question is what are the possible impacts if this effect were to occur.  These second-order impacts are linked to their first-order impacts, or as far as the group would like to get.  Typically, third- and fourth-order impacts are sufficient to explore all of the significant impacts in the environment of the initial event.  Usually a group will identify several feedback loops in which a fourth-order impact tends to increase or decrease a third- or a second-order impact, etc. The value of impact networks lies in their simplicity and in their potential to identify a wide range of impacts very quickly. If more impacts or higher-order impacts need to be considered, the process is repeated.

An example of an impact network developed in the SCUP-19 workshop is depicted in Figure 3, the impact of having an average SAT score of 700 in the entering HRC freshman class.  The initial impact of the event will be a restructured curriculum, a change in the placement of graduates, a new institutional image and increased or maintained enrollment.  Restructuring the curriculum would imply increased remedial/developmental offerings and a change in faculty assignments, which in turn would lead to faculty disenchantment (an event which might also follow the news of the average SAT score!).  A new institutional image would lead to the loss of alumni support (and, thereby, loss of revenue from that source), to a geographic constriction of the market, and to a further change in the composition of the student body.  The third-order impact from the latter event would be increased need for financial aid, more counseling and other support services, all of which imply increased costs for HRC.

A completed impact network is often a very revealing document. In one sense, it serves as a Rorschach test of the organization because the members of the group are most likely to identify impacts highlighting current areas of concern.  In another sense, by trying to specify the range of second, third, and fourth-order impacts, new insights into the total impact of a potential development can be identified. For example, while an event may stimulate a majority of small, positive impacts in its first-order impacts, these first-order impacts may stimulate a wide range of predominantly negative second-order impacts that in total would substantially reduce if not eliminate the positive value of the first-order impacts. Feedback loops may promote the growth of an impact that would far outweigh the original estimate of its importance. 


The concept of strategic planning is rather straightforward, and differs from conventional long range planning by focusing on detecting signals of change in the organization's environment and then using this information in conjunction with analyses of the organization's mission, strengths, and weaknesses in determining strategic choices.  Although the technology of environmental analysis can be complex (see Morrison, Renfro, and Boucher, 1984), some of the methods used in this technology are relatively easy to learn and use.  Specifically, it was possible within several hours to establish a simple environmental scanning taxonomy and identify a number of issues facing colleges and universities today. Of course, a more elaborate taxonomy and concomitant scanning system would take substantial time to establish and operate (Renfro and Morrison, 1983), but our experience in the SCUP-19 workshop indicates that it is possible to learn the principles quickly.  So, too, our experience in the workshop indicates that it is possible in a relatively short period of time to learn how to 1) use probability impact charts in ranking and evaluating issues and 2) use impact networks to aid us in thinking through the implications of those events or issues identified in the environmental scan and evaluated in the probability impact charts.  Such analyses are necessary in order for decision makers to make informed strategic choices. 

James L. Morrison is professor of education at the University of North Carolina at Chapel Hill.  Robert G. Cope is associate professor of education at the University of Washington.


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