Beyond risk mitigation: Enhancing corporate innovation with scenario planning

The impact of exogenous shocks on business strategy, and possible responses to those threats, have received growing attention when considering the challenges of conducting business in an increasingly complex business environment. Scenario/contingency planning is a tool used by firms to translate their organizational learning capabilities into preconceived operational responses designed to react to, and then recover from, an exogenous shock. The use of scenario planning that includes exogenous shock scenarios has become a best practice in many industries. This article explores the additional potential usefulness of scenario planning as a tool for promoting innovation and corporate entrepreneurship.