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BACKAST VUCA.pdf
1. Journal of Strategy and Management
Backcasting as a strategic management tool for meeting VUCA challenges
Kent Thorén, Martin Vendel,
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To cite this document:
Kent Thorén, Martin Vendel, (2018) "Backcasting as a strategic management tool for meeting VUCA
challenges", Journal of Strategy and Management, https://doi.org/10.1108/JSMA-10-2017-0072
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3. with each challenge in isolation and with improper countermeasures. A similar framework,
“VACINE” – an acronym for Velocity, Agility, Creativity, Innovation, Network and
Experimentation – developed by Peter Hinssen (2015), describes attributes of organizations
that should be successful under VUCA, but gives limited advice regarding decision making
and how to devise a strategy. Lacking appropriate tools for strategizing, business executives
often resort to increasingly sophisticated prediction methods (e.g. Delphi methods, trend
extrapolation, etc.) or hypothesis-driven strategizing, a method helping managers to
systematically incorporate issues that are not directly observable (e.g. Liedtka, 2000).
While certainly useful for testing assumptions and identifying critical uncertainties, these
methods still appear difficult to apply under high ambiguity. They also seem insufficient for
long-term strategies and neither of them go deeply into assessment of the forces shaping
industry transitions.
Beyond the limitations of these and other similar methods, practitioners have largely
been left with anticipation and envisioning exercises by using scenarios as the main
alternative to simple gut feeling (Gordon, 2009; Popper, 2008). Scenarios are useful when
forming and sharing views about plausible futures, creating a fundament for strategic
discussions. However, such shared views of the future may give limited guidance about
what to actually do. To effectively support action, they need to be supplemented by
additional strategizing methods. Otherwise the scenario processes may end up as soon
forgotten exercises in creativity without sufficient impact on strategy formulation
(Boutellier et al., 2007).
Given the challenges of management in regards to VUCA – and the limitations of popular
strategizing practices, examplified above – there is clearly a need for methods that can both
inspire an effective dialogue about distant futures and support strategy making. This could
provide organizations with both direction (where to go) and guidance (how to get there)
by enabling its participants to co-create desired end-states as well as the possible paths to
them (Robinson et al., 2011).
Some organizations have started to apply a method that seems promising in these
respects, referred to as “backcasting” or “retrospection” (Eisenhardt, 1999; Holmberg and
Robèrt, 2000; Robinson, 1992; Rollier and Turner, 1994). In contrast to regular forecasting,
backcasting addresses the long-term future by looking backwards from it toward the
present. In simple terms, backcasting starts by letting a group of people assume that some
future state has already been attained and then challenge them to answer: What has
happened in order for us to get here? (Figure 1).
Backcasting started as a technique for exploring near-future requirements for long-term
sustainability (Robinson et al., 2011). But the method is highly versatile and can be used for
dealing with any long-term issues that are complex, include forces that are not under the
organization’s control, and which require more than marginal change (Dreborg, 1996). This
suggests that it has potential for supporting managers facing the difficult circumstances
discussed above. As backcasting is starting to become formally applied in business, it is
important that it is thoroughly examined regarding its applicability, usefulness and
limitations. So far, however, backcasting appears under-explored in the business
management literature and is rarely even mentioned. This study therefore explore
backcasting as a general strategic management tool. It’s purpose is to assess the validity
and relevance of backcasting for supporting business strategy formation, using VUCA as
the base framework for requirement criteria. By using VUCA as criteria, key aspects facing
managers taking long-term decisions under challenging conditions are integrated in the
analysis. The paper will also exploit the insights gained in the assessment to more closely
identify the usefulness of backcasting, thereby making practitioners aware about how it can
reliably enrich their strategy processes. In addition, it will guide researchers toward critical
areas for additional study.
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4. The paper starts by exploring fundamental challenges of strategy making and then
explains backcasting and its background. Next, it summarizes the limited findings on
backcasting in previous business research and performs the assessment. This is followed by
a section with conclusions, as well as potential problems and limitations of applying the
method within the business management domain. The final section summarizes and
discusses the findings and gives suggestions for further research.
2. Challenges of long-term strategizing
For decisions, a general rule is that the further into the future it aims the higher the level
of uncertainty (Gordon, 2009). Approaches to strategy making should therefore vary
accordingly. For time horizons that are short relative to the level of volatility in the business
environment, attempts to acquire more information and make forecasts that predict future
circumstances makes sense. In fact, if the scope is not too wide, it is probably the best
approach for grounding decisions. For longer time frames, however, it is more or less futile
to try to predict the future. The number of factors and possible interconnections between
them simply grows too large (cf. “wicked problems”) and the long series of interactions make
minimal changes in initial conditions cause very different outcomes (cf. “butterfly effect”).
Foresight researchers therefore argue that for long time horizons it is better to aim for being
vaguely right than for being exact but wrong, as would be the result of quantitative forecast
methods, due to their sensitivity to assumptions (Gordon, 2009). Foresight therefore aims
towards maintaining an informed and coherent forward view while using the insights
gained in useful ways (Slaughter, 1998). This is more a question of understanding what is
possible than of predicting what is most likely. If used effectively, foresight gives the
organization an understanding of the world itself, how it can be affected by actions, and to
what effect. It thereby helps forming an intersubjective sense-giving “web of reason” that is
co-created by individuals and shared through socialization (Brazeal, 2011).
Assessing if a method is suitable for strategic management under VUCA requires that the
four challenges are understood, both individually and in combination. Starting with
uncertainty, it is often defined as a lack of information. Thereby it is distinct from ambiguity;
which instead regards equivocality of situations (Daft and Lengel, 1986) and difficulty to
Forecasting
Predict the likely near-
term future
Explore alternative
futures
Assess feasibility and
finding paths to a
selected future
Scenarios
Backcasting
Time
Present
Present
Present
Future
Future
Future
Figure 1.
Common methods
for understanding
the future
VUCA
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5. understand cause-effect relationships (Bennett and Lemoine, 2014a, b). In contrast to absences
of information, which is resolved by getting questions answered, ambiguity regards the
problem of multiple and conflicting interpretations that create confusion, potentially making it
difficult to even figure out what questions to ask.
Complexity and volatility are, on the other hand, attributes of the actual situation in
question, rather than of the availability and quality of information about it. They are hence,
at least to some degree, exogenous and given circumstances. Complexity can be defined as
the number of variables in the information space relevant for a certain decision and the
amount of interaction between those variables. Volatility, in turn, refers to the rate of change
within the information space, both in the variable set and in the values for each variable.
Both complexity and volatility drive uncertainty (in terms of ignorance about the value for a
variable) and ambiguity (in terms of ignorance of whether a variable exists in the space at
all) (Daft and Lengel, 1986).
Courtney et al. (1997) relate uncertainty and ambiguity to each other using a four-level
scale, see Figure 2, where “true ambiguity” is the most challenging condition.
Moving downwards through the levels of uncertainty requires information. However, just
as situations are uncertain in different ways, the information required also differs. In particular,
the type of information that can reduce lower-level uncertainty will not be useful for dealing
with ambiguity. Under uncertainty decision makers can be aware of available options, their
preferences for them and the relevant evaluation criteria. They can therefore understand which
data is useful and apply it effectively if they get it. But this is almost never the starting point
when taking long-term strategic decisions. Instead, it is common that substantial ambiguity
needs to be resolved first, and this is only done by acquiring “rich information” that is
clarifying, context defining and sense-giving (Daft and Lengel, 1986). Rich information relies on
discussions where opinions get interchanged and questions can be aired to reach agreement on
relevant decision variables. It cannot be condensed to a few words or numbers. Therefore, it is
through discussion that ambiguity gets transformed into residual uncertainty.
Resolving uncertainty on the other hand can be done with so called “lean” information.
This is information that can be made concrete and tends to be based on facts rather than on
Level 1
Level 2
Level 4
Decision-making difficulty
(Uncertainty)
Complexity
Volatility
Drivers
Clear enough future
Alternative futures
A
B
C
Range of futures
True ambiguity
Level 3
Figure 2.
Relationships between
the VUCA factors
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6. enacted consensus. “Lean” refers to the high level of condensation possible for this type of
information, as it can be expressed in text or even numbers (Daft and Lengel, 1986). Resolving
uncertainty with a limited amount of information may be possible if the relevance and meaning
of the information is already understood. It is like fitting a piece into a puzzle that is already
semi-finished. Under ambiguity, on the other hand, it is not possible to usefully apply concrete
lean information; instead it may even cause additional confusion, as there is no understanding
of the puzzle or its resolution. Finally, after applying all the information that is available,
strategist need to manage any critical residual uncertainty by modeling decisions, hedging
bets, or monitoring trends.
In conclusion, any method that aims to inform long-term strategic decisions needs to be
aligned with the requirements of: achieving direction by a framing a reasonable vision of a
future that is “ball-park” likely while also utilizing rich information to resolve ambiguity
about the organization’s role in that future, and outlining the dynamics of main plausible
development paths toward which a guidance-giving strategy can be matched. Moreover, it
needs to be applicable despite volatility, complexity, and uncertainty. These six aspects
constitute, in this study, the basis for the assessment evaluating backcasting as a strategic
management tool.
3. Backcasting, its origin and generic process
Backcasting originates as a method for future study in research addressing climate change,
first occurring in the work of Robinson (1982). Its early use in environmental policy and
climate change research is described by Dreborg (1996). Examples of such backcasting
projects include studies of environmental sustainability (Robinson et al., 2011), food
production and/or consumption (de Kuijer et al., 1997; Devaney and Davies, 2017) and
transportation policy (Järvi et al., 2015). The objective is normally to raise awareness among
policy makers about what needs to be done now and within the near future, to avoid
severe long-term environmental change. However, over time, additional studies have
brought cumulative refinement and extension leading to a complete, encompassive
and consistent strategy formation method evolving around backcasting. This Framework
for Strategic Sustainable Development (FSSD) prescribes an integrated process taking a
holistic perspective for core institutions in society; i.e. business, governance and education
(Broman et al., 2017).
Looking more specifically at backcasting in isolation, it starts by framing uncertainty
and complexity in systems by depicting a target future. In contrast to scenario planning,
however, the depicted future, referred to here as “vision,” is chosen, not predicted. The way
it is constructed appears to be fairly important for the success of the process. For longer time
frames, visions may need to be defined so they are somewhat flexible, as progress will bring
new problems and solutions into play and insight gained may change our view on initially
targeted visions dramatically (Broman and Robèrt, 2017).
Figure 3 illustrates a generic base process suggested by Quist et al. (2011) after
investigating a large number of backcasting projects for dominant patterns of practice.
The reason for engaging in backcasting tends to be some type of strategic problem
emerging in a sociotechnical system of interest, for example a new technology threatening
established business models in an industry. Once an interesting end-state vision of a future
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
• Strategic
problem
definition
• Develop future
vision
• Backcasting
analysis
• Elaborate future
alternative and
define follow-up
agenda
• Embed results
and agenda to
stimulate
follow-up
Source: Based on Quist et al. (2011)
Figure 3.
Five-step process
VUCA
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7. situation in this macro system is defined, the central idea of backcasting is to connect it to
the present retrospectively. It is usually done in workshops where stakeholders, experts and
other participants gets challenged to outline trajectories to it under the assumption it has
already happened (Popper, 2008). Assuming the future state as already attained helps
participants to be creative, question the status quo and mutually learn about how this future
may happen. Using interactive workshop formats allows for the exchange of rich
information that activates and utilizes participants’ creative learning and probing processes,
so they can co-create alternative development paths (Costanzo, 2004).
In steps 3 and 4, the actual backcasting occurs, often starting by complementing the
vision with a corresponding definition of the current state, so that participants can agree on
the gap between the two. This can be followed by brainstorming around solutions and
actions typically resulting in fairly long lists. Choosing which actions and solutions to
assess further is done based on their potential contribution to success, as specified in the
vision. But rather than being evaluated in isolation, participants try to understand how
actions and solutions play part in options that can serve as stepping stones toward a
situation where the strategic problem no longer exists. When options are sufficiently
assessed – taking into account possible amendments to the vision that may come up in the
processes – prioritization of different courses of action also take into account additional
strategic constraints that has been disregarded so far. Strategic trade-offs can thus be
integrated and understood in regards to the complete picture of alternative routes, which is
far more reasonable than directly selecting specific actions based on the immediate
perception of them as good or bad. The results constitute the base input for specific strategy
formulation and planning in step 5 and beyond.
The use of reversed thinking in backcasting has some powerful psychological effects
that, for two reasons, are difficult to accomplish with forward thinking. First, backcasting
allows for discussions about the future to be less tangled by the complexity of the present.
Starting from an assumed future has the powerful impact of liberating discussions from
mental boundaries about current customers, products, limitations and capabilities.
Participants can go straight to discussing the vision and invent a suitable approach for
success in that future without many constraining presumptions and defensive objections.
Second, the human psyche is not symmetric in how it views past and future events. Instead
it perceives future problems as much more concrete than future opportunities, thus
hampering strategic management by making dangers compelling, rewards unconvincing
and consensus elusive. Assuming that a vision already has come true activates thinking
mechanisms of recall and reflection, which do not tend to get flooded by anxiety about
problems as easily. Backwards thinking therefore provides a comparably sober view of how
things are connected (Jönsson, 2005).
Moreover, Quist et al. (2011) emphasize the importance of involving everyone
attending a workshop, making sure they participate actively. Such “participatory”
backcasting is argued to give both better outcomes and increase commitment to the
resulting agenda. The reason for the latter the is enhanced understanding and buy-in
from individuals regarding their specific roles in accomplishing the vision. Commitment
and agreement from stakeholders are critical for the follow-up activities, especially if
some of them control resources that are needed for strategy implementation
(Zimmermann et al., 2012).
4. Current application of backcasting in business management
As backcasting is normative rather than predictive in its purpose, it can be used more freely
and for much longer time horizons than predictive forecast methods. In fact, it has been
proposed to be particularly useful when there is a large, broad set of stakeholders involved
and when things are difficult or impossible to forecast (Dreborg, 1996). With the inclusion of
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8. multiple perspectives from diverse participants, backcasting can also lead to a greater variety
of options to choose from (Nikolova, 2014). This all sounds promising in regards to its
potential application for strategic management.
Even though anecdotal evidence suggests that backcasting has been applied in
strategic management (Eisenhardt, 1999; Rollier and Turner, 1994), surprisingly little
has been written about it (Keenan and Popper, 2007). The few mentions found, when
reviewing 24 major foresight, strategy and management journals, are spread over a
number of sub-areas.
In strategic management, backcasting appears to function as a method for exploring
possible future states of a relevant socio-technical system; like how a firm’s business
environment would look like if there is a radical change in some particular key
parameters such as technology or customer needs. So far, the most frequent mentioning
of backcasting is found in management literature on innovation. For example,
O’Connor and Veryzer (2001) and Topalian (2000) connect it to creativity and what-if
modeling for driving innovations of products and technology. Backcasting is also
proposed to support the realization of innovations, since it can improve opportunity
search (see e.g. Uchihira et al., 2015) and guide the choice of which innovations
opportunities to pursue (see Gold, 1980).
In relation to strategic foresight (Slaughter, 1997) and technology foresight (Buotellier
et al., 2007; Magruk, 2011), backcasting is sometimes mentioned among potential tools for
imagining future technology disruptions, when working with time frames beyond where
extrapolation would be effective. The terminology may vary. For instance, Rohrbeck
describes the practice as “scenario-based retropolation,” which “uses future scenarios to
give directions for today’s planning” (Rohrbeck, 2010, p. 141). “Prospective hindsight” is
another term for backcasting that is predominantly used in project planning. This is
backcasting starting from visions about the outcomes of plans. With positive visions,
teams may reveal important success factors and enhance motivation (Klein, 2012). Visions
of failure, on the other hand, can help the team to identify risks and problems (Klein, 2007).
This approach is applicable in firm-level strategy making as well (Meissner and Wulf,
2015). Other researchers describe it as using “backward logics” when preparing for
strategy making. They argue that, with visions of macro-environmental end-states,
backward reasoning can construct causal links that give a strategic overview for dealing
with problems where a current-state analysis has little relevance (Meissner and Wulf,
2015; Wright and Goodwin, 2009). Some even suggest that firms may use backcasting
insights to take actions that could influence the development of the competitive space in
their favor (Vecchiato, 2012).
Backcasting has also been explicitly proposed as an approach for strategic decision-
making. Eisenhardt (1999) mentions backcasting as one of the frame-breaking techniques
that can be used for constructive argumentation, often applied by successful executive
teams in fast-changing markets.
In corporate sustainability literature, foresight and backcasting have been pointed
out as tools that can help managers avoid making decisions today that limit options
for decision-makers in the future. It thus helps maintain flexibility and openness in
decision-making and may be used to explore outcomes of major changes (Will, 2008).
Broman and Robèrt (2017) also give numerous examples of strategic behavior informed by,
or analogues to, the FSSD. This suggests that the framework is spreading and that
backcasting thereby gets increasingly understood and used.
5. Assessing the relevance and validity of backcasting in strategic management
Dreborg (1996) and Nikolova (2014) assert that backcasting is suitable for situations that
exhibits many of the circumstances linked to strategic management (see above). It would
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9. nevertheless be prudent to also recognize that applying backcasting in strategic
management is somewhat different compared to its traditional use in sustainability studies:
• First, in early sustainability applications, the visions typically state consumption
or environmental impact levels as targets. This means using a predefined state
of the socio-technical system itself as the vision. Business executives, on the
other hand, are more likely to use the organization’s position in a future
socio-technical system as the backcasting vision (Broman and Robèrt, 2017;
Schoemaker, 1997).
• Second, only the socio-technical system and time frame is predefined in so called
“participatory backcasting.” This allows participants to form the visions as a part
of the exercise, e.g., Zimmermann et al. (2012). In contrast, visions tend to be
predefined by executives in business management backcasting, or at least
developed under their control.
• Third, rather than exploring the general socio-technical future, workshops are likely
to be more focused and emphasize on issues like potential threats, opportunities and
strategic positions.
• Fourth, the choice of stakeholders to involve may also differ. Executives may be more
prone to select participants tactically based on business or corporate considerations.
On the other hand, there are also similarities:
• Just like environmental problems, strategic business decisions tend to be “wicked”;
involving many interconnected issues in a complexity that is not easily untangled
(Mason and Mitroff, 1981). These issues also increasingly involve ecological
concerns. Environmental concerns are thus steadily getting more and more entwined
with the economic sustainability of businesses (Broman et al. 2017).
• Another similarity is that both deal with complex socio-technical environments that
evolves in a path-dependent manner through punctuated equilibriums making the
past an unreliable predictor of the future (Zimmermann et al., 2012).
The section “Challenges of long-term strategizing” above concluded that backcasting need
to handle all the four elements of VUCA, as well as providing direction and guidance, to be
considered relevant and valid. In this section, backcasting is assessed in regard to each of
this criterion. This assessment is summarized in Table I, which also includes other proposed
remedies to VUCA for contrast.
Dealing with ambiguity
Ambiguity affects decision making in the form of unclear cause-and-effect relationships
(Bennett and Lemoine, 2014a, b), which in social sciences correspond to the logic by which
means (like strategies and initiatives) are connected with ends (like visions and
intentions). Backcasting makes situations less ambiguous by explaining corporate
intentions and connecting them to the means for achieving them, so employees can align
efforts instead of struggling aimlessly in an uncoordinated manner (Ansoff, 1991). Dealing
with a decision that is ambiguous requires that the group first reach a shared situational
understanding. This is essentially an exercise in sense-making, the art of collaborative
problem formulation. Backcasting, being a collaborative visionary exercise conductive to
rich information, supports this process. It helps decision makers resolve ambiguity
through its broad inclusion of people and perspectives in discussions, but also transforms
remaining unclarities into residual uncertainty at level 2 or 3 against which companies can
define strategic options or pinpoint trends to monitor.
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10. Dealing with complexity
In backcasting, discussions about the future tend to be less tangled by the complexity of the
present. Starting from an assumed future has the powerful impact of liberating discussions
from mental boundaries about current customers, products and capabilities. Instead,
participants can go straight to discussing the vision and invent a suitable approach for
achieving it, without many constraining presumptions. This makes it easier to incorporate a
broader context in the process, and keeps it from being biased by recent or general factors
(Meissner and Wulf, 2015). As backcasting accepts a broad and scattered input that gets
transformed to a rather structured output, it is possible to argue that a subjective complexity
reduction has occurred. Moreover, while backcasting does not remove objective complexity
from the external environment, it may help practitioners to more easily judge which issues
they can disregard, thereby framing out some complexity and having less of it to process.
Dealing with uncertainty
A similar framing effect is at play when it comes to uncertainty. As the picture of where the
organization wants to go and how it could get there gradually takes form, it also becomes
VUCA Prime
leadership tactics
Management
under VUCA Backcasting
Main references
Kinsinger and
Walch (2012),
Kirk (2013)
Bennett and
Lemoine
(2014a, b)
Eisenhardt (1999), Meissner and Wulf (2015),
Popper (2008), Slaughter (1997)
Approach
requirement Cause of need
Normative
proposals and
benefits
Normative
proposals and
benefits
Process effects and
outcome Benefits for the firm
Provide
direction
Confusion about
where the
organization is
heading
Formal visions
can provide
direction
Not addressed Common view of the
future
Direction orientates
action
Give
guidance
Confusion about
how to realize a
vision
Not addressed Not addressed Common view of
development paths and
agreed options
Guidance regarding
actions needed and roles
in realizing them
Acting
despite
volatility
“Clock speed” of
environment
higher than the
organization’s
“Vision” –
through clear
statement of
where the
organization is
heading
Stockpiling
resources to
achieve slack
Mental preparedness
Contingency options
Less vulnerable because
of agility and robustness
Resolving
and
managing
uncertainty
Lack of
information
“Understanding” –
through the ability
to “stop, look, and
listen”
Get more
information
Vision substitutes
certainty as basis for
action
Monitoring critical
uncertainties
Contingency options
Guidance
Strategic agility
Reduction
of perceived
complexity
Multitude of
elements and
their
connections
“Clarity” –
through
deliberate efforts
to “make sense of
the chaos”
Restructure
Use
specialists
Build
capability to
work despite
complexity
Simplification through
abstraction
Framing of complexity
(disregarding of issues
far from relevant paths)
Decreased subjective
complexity
Less objective
complexity to “muddle
through”
Resolving
ambiguity
Confusion due
to unclarity and
lack of cause-
effect
understanding
“Agility” – by
communicating
across the
organization and
applying
solutions quickly
Hypothesis
development
and testing
Experimental
trial-and-error
Agreement on intentions
Means-ends logic that
clarifies reasons
Intentions provide
direction and purpose
Less misunderstanding
and sub-optimization,
more focus and clarity
Table I.
Assessing backcasting
in strategic
management
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11. easier to distinguish factors that are highly relevant from those that could safely be ignored.
Knowledge-sharing in the process also informs participants about the relevant factors, so
these can be defined, analyzed for impact on strategic alternatives, and properly monitored.
This understanding of impact opens two principal ways to ensure corporate survival
despite unpredictable change in conditions. Either the organization makes the strategy less
sensitive to significant deviations from the envisioned future, or it incorporates flexibility
though options into the strategy. The former approach is referred to as strategic robustness
while the latter is about making strategies more agile (Beinhocker, 1999). Robustness means
that strategies are designed to give favorable outcomes under several different
circumstances. Usually, this is done by developing several scenarios and then evaluating
alternative strategies against them before deciding what to do. Robustness may then be
achieved by selecting and adjusting the strategy that leads to positive outcomes in the
largest number of scenarios, even though it may be less than optimal in some.
As backcasting is based on a single scenario, it supports robustness primarily in regard to
variations of that main scenario. But the insight from uncovered development paths and
trend effects can aid a broader the assessment of strategies. This is especially worthwhile
when taking big, irreversible and no-regret moves. It enables companies to make hedging
bets and reduce the risk of failing due to a too narrow view of the future (Beinhocker, 1999).
Dealing with volatility
Backcasting – with its overview of possible paths, key decision points and alternatives – also
supports strategic agility (Beinhocker, 1999). Compared to scenario planning, backcasting
tends to be less time consuming with simpler workshops that typically require less research.
Still, the upfront sharing of views has the potential to make decision-making smoother and less
encumbered by misunderstanding, insecurity and conflict. The output helps organizations to
prepare key decisions while keeping attractive options open. It can also define signpost, from
the trend and path assessment efforts, that can alert the organization about when it is time to
take action (Schoemaker, 1997, 1998). This should make the organization better positioned for
quickly adapting to changing circumstances and new developments. This way of achieving
agility, through mental and organizational preparedness, is most likely a less costly approach
to deal with volatility than mere stockpiling of resources (cf. Bennett and Lemoine, 2014b).
Providing direction
Backcasting starts by developing or discussing the target vision. This effectively replaces
individuals’ unsynchronized view of the future with one that is shared. The fact that this
happens at the start of the process makes it substantially easier for participants to agree on
options and preferences. Thus, backcasting supports groups’ future-oriented sense-making;
where individuals’ mental maps converge by sharing projections and forming collective
“memories” of the future (Vecchiato, 2012). The inherent socialization effect, in turn, results
in stronger orientation about where the organization is heading (Robinson, 1982; Robinson
et al., 2011). The result is valuable higher-order learning on the group level, manifested as a
sort of “collective intuition” that enhances sense of direction and momentum, while reducing
sub-optimization, pseudo conflicts and unconstructive politics (Eisenhardt, 1999). In a sense,
direction supports alignment, both mentally and in action.
Giving guidance
When working with long-term strategy, it is likely that managers encounter problems which
they have not seen before, or that are so complicated that they cannot determine all aspects
of the work lying ahead due to deficit of specific information. The discussions about how to
meet the future and, in particular, articulating different paths or strategies available to the
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12. firm, helps resolving such (task) uncertainty and gives guidance about what to do and why
(Robinson, 1982; Robinson et al., 2011). This is primarily due to the prospective manner in
which backcasting defines follow-up activities, so people understand their personal role in
accomplishing the new future.
Active involvement in the backcasting exercises also enhances stakeholder’s
commitment to the follow-up activities (Vergragt and Quist, 2011). The social and
mind-widening experience of co-creating a worldview seems to have powerful motivational
effects, both for the individuals and for the group. Buy-in tends to get stronger through a
feeling of ownership of the strategy and the sense of collective objectives. The result is
coherence in organizational action and a form of tacit coordination that is more efficient than
most administrative mechanisms (Rumelt, 1980).
6. Limitations and challenges when applying backcasting in
strategic management
The most obvious limitation of backcasting is probably the use of a single static vision.
While helping participants to mentally disconnect from the current, there is also a risk that
the future will turn out so different from the scenario that the strategy becomes
inappropriate and cause failure. Care must therefore be taken to avoid defining the vision
too narrowly or retaining too few path options when forming strategy (Beinhocker, 1999).
Another challenge regards forming a useful vision. There are at least two pitfalls where
unsuitable visions can lead the backcasting astray. In some cases, the vision is allowed or
tweaked to be political rather than objective (Dreborg, 1996). This happens when stakeholders
try to shape the backcasting exercise to push a certain agenda, which may become a problem
if the goals of that individual diverge strongly from those of the firm. Even when intentions
for limiting the freedom of vision discussions are constructive and justified, such limitation
needs to be traded off against reduced analytical broadness. The second vision pitfall is the
inclusion of (technical) solutions in problem definitions or scenarios. For example, if the
objective is to improve customer loyalty, the vision should not be “us having the best loyalty
program in the industry.” A loyalty program is but one of many possible solutions to the
problem and stipulating it may preclude others that could be effective, such as efforts to
increase quality or changes to the revenue model. Similar problems have been reported in
sustainability-oriented practice as well where entrenched positions regarding different
solutions has blocked progress when visions were specified too much as detailed targets or in
forms that are not sufficiently operational. The FSSD illustrates one example of how to solve
this by stipulating that sustainability should be defined (thus framing the target vision) from
certain principles rather than as a detailed scenario (Broman and Robèrt, 2017).
At last, as with other foresight methods – and strategic management in general – managers
still need to consider the risk that no matter how brilliant the analysis and conclusions are,
firms may still fail in achieving actual change. In other words, they need to take the so-called
“implementation gap” into account (Boutellier et al., 2007). When using backcasting, this risk
should be reduced if the workshops involve the right people. But participants must also
produce sufficiently specific output. Otherwise, it may be difficult to define strategic initiatives
and create clear roadmaps (Costanzo, 2004; Johansen, 2007). On the other hand, it is also
possible to use backcasting during strategy implementation to uncover potential gaps between
the intended results and where efforts are heading (cf. Klein, 2007).
7. Discussion and conclusions
Even though backcasting resembles everyday decision-making and planning – like
planning a dinner or vacation by starting with the envisioned experience and
then figuring out what needs to be done – its formal use in corporate settings seems
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13. limited so far. Instead, decision processes in many firms generate incremental plans based
on current-state analysis. This is falsely perceived as less risky and can, indeed, lead to
mere incremental success at best and may, at worst, take the firm adrift, making it
increasingly unfit for its environment (Drew, 2006). This paper has three ambitions as
specified in the introduction: to assess the validity and relevance of backcasting for
business strategy formation, to specify the usefulness of backcasting in strategy
processes and to suggest areas for additional study.
The review and assessment show that backcasting appears to be a management
innovation relevant for organizations seeking to process long-term decisions undeterred
by VUCA. It does so by generating and exchanging rich information about possible
futures but is not an approach intended for precise prediction. Backcasting aims toward
tackling ambiguity and stimulating long-term thinking, which also gives useful process
effects such as consensus-forming and stakeholder buy-in. In particular, backcasting
helps organizations challenge prevailing mindsets and overcome cognitive barriers when
major transitions are necessary. The vision, combined with the uncovered strategic gap
and overview of possible paths, gives criteria and boundaries useful for more precise
strategy formulation activities in subsequent steps. It also has additional benefits such as
vision sharing that supports direction, guidance given by shared understanding of
possible paths and increased commitment by individuals to their roles in the resulting
strategies. Another contribution is the establishing of norms of openness, diverse option
seeking and constructive conflict (Eisenhardt, 1999).
VUCA was used as an evaluative framework to ensure the validity of the assessment
given the demanding circumstances of modern management. This also enabled the
assessment to reveal insight about the specific usefulness of backcasting in strategy
processes. The main benefits may be summarized as follows:
• Regarding volatility; backcasting helps managers lift the gaze so they can contrast
the turbulence of daily management with more big-picture developments. It also aids
managers to safeguard against volatility by pre-defining key decision points,
establishing contingency plans, monitor sign-posts for change and strengthening
strategies’ robustness and agility. These benefits give managers useful alternatives
to general stockpiling of resources as a means for preparedness by maintaining slack
(cf. Bennett and Lemoine, 2014b).
• Uncertainty is inseparable from strategic decisions as the future is always undecided
until it occurs. But by supporting abstraction – much needed for strategy formation
and business model reconfiguration (Normann, 2001) – backcasting provides a
helicopter view that managers can use to explore alternative paths and options. Key
uncertainties can be exposed and their drivers defined, thus decreasing the amount of
strategic blind spots. Some uncertainties can then be disregarded due to limited
importance, others resolved by gathering information and the rest monitored for
signals of change. This limits the need for hedging bets to those necessary for
keeping important options open.
• This abstraction effect also eases the overwhelming processing needs that
complexity puts on decision-makers. With an overview of the strategic landscape,
issues can get framed, grouped, aggregated and evaluated for urgency. Combined
with the focus obtained from guidance and orientation effects, managers can better
judge what to safely disregard, thereby reducing the amount of complexity to
“muddle through.”
• Ambiguity, in turn, is reduced as backcasting clarifies the relationship between
means and ends in the strategy. By exchanging rich information in backcasting
workshops, participants are co-creating strategy; implying that these
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14. relationships are not only understood, but actually a product of the group’s
collective sense-making process. Thereby, it provides an alternative to resolving
ambiguity by trial and error experimentation as proposed by Bennett and
Lemoine (2014b).
Executives who possess the insight and courage to work toward broadly-defined futures
also need to build their strategies accordingly. The two dominating ways to do this are to
aim for strategy robustness or strategic agility. Both of these are about minimizing the
consequences of being wrong rather than optimizing plans toward a narrowly defined
far-away future. It is, nonetheless, also useful to remember that while comprehensive
certainty about the future is unfeasible, it may not be necessary. It is, after all, intentions,
not facts, that drive action in times of transformation. With imagery and narrative, vision
can substitute certainty as a basis for action since it makes corporate intentions and
reasons manifest (Hedberg and Jönsson, 1977). Backcasting allows for sharing of visions
and discussion of purpose, which can be a starting point for a web of reason enabling
managers to think effectively about the future early on, prepare for it before it comes, and
deal with it when it is upon us.
Finally, five suggestions for future research were derived from this exploratory and
conceptual study. First, more systematic empirical mapping can create an improved
overview of the dispersion and variation of backcasting practice. Second, deeper empirical
examinations of benefits and drawbacks should be conducted, so that backcasting can be
applied with greater confidence in the future while more effectively addressing VUCA and
other challenges. Third, further research should also consider managers combined use of
foresight and strategy methods to operate under VUCA. This would complement and
extend the few available studies on mixed methods (Zimmermann et al., 2012). Forth, it
would be highly valuable with research providing more concrete examples of backcasting
with specifically described variations in process for dealing with different business
problems. Finally, the benefits of utilizing the FFSD framework for general strategizing
should be studied further. The reason is not only that long-term ecological development is
a major force shaping the socio-technical system in which firms must succeed – embedded
in the opportunities and threats that companies needs to navigate for the long-term
economic sustainability (see an elaboration by Baumgartner and Rauter, 2016) – it is also a
consistent and tried method that may help managers to avoid pitfalls and unnecessary
process failures.
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Corresponding author
Kent Thorén can be contacted at: kthoren@kth.se
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