Backcasting as a strategic management tool for meeting VUCA challenges

Abstract

Purpose Backcasting helps managers involve and align the organization throughout a strategy process. Its core idea is creating a logical path from a depicted future back to the present, to share, analyze and manage strategic challenges. Still its use in strategic management is under-researched. The purpose of this paper is to verify the relevance and validity of backcasting as a strategic management tool. It also analyzes and structures knowledge about backcasting and its practical application in strategic management. Design/methodology/approach This paper employs desktop research method to outline the benefits and limitations of backcasting for strategy formation under VUCA conditions. Findings Backcasting can help organizations overcome cognitive barriers and broaden the scope of options when analyzing future positions. The research provides insights regarding the potential and limitations of backcasting when addressing uncertainty and its drivers. For instance, it helps managers to assess and align visions; increase the understanding and clarity regarding complex dependencies; as well as improve strategic agility. Practical implications Backcasting is exceptionally useful for investigating possible futures and alternative paths to it. Backcasting is an interactive workshop-based method that challenges prevailing mindsets by assuming we are in the future, looking back towards today to find a feasible path when major transitions are necessary. With it, managers can deal with even the most uncertain decisions in a structured manner. Originality/value Backcasting for many reasons has a great potential as a tool for strategy development. It has been successfully applied in other fields but only to a limited extent in business. This paper formally examines its applicability in this context and demonstrates its relevance for dealing with VUCA challenges.

Pandemics and environmental shocks: What aviation managers should learn from COVID-19 for long-term planning

“…Through embracing uncertainty as being a vital factor for long-term planning, aviation managers will understand that strategy under uncertainty is different from classical strategic management (see Fig. 2 ; adapted from prior studies of Star, 2007 ; Amram, 1999 ; Thorén and Vendel, 2019 ). Whereas classical strategic management is vital in times of clear-enough or alternate futures , strategic management under uncertainty means that managers need to deal with higher ambiguous futures and even actual ambiguity .…”

Backcasting for desirable futures in Finnish forest-based firms

“…Dreborg, 1996;Quist and Vergragt, 2006;Vergragt and Quist, 2011). Thorén and Vendel (2018) emphasize that backcasting can help organizations challenge current mindsets, thus widen the views on different alternatives when analyzing different (long-term) future options. Based on their review, backcasting has a large potential as a tool for strategy development particularly under VUCA (volatile, uncertain, complex, ambiguous) conditions.…”

“…To date, backcasting has been mentioned mostly in the innovation management literature. Business executives are often more willing to apply more sophisticated future approaches such as Delphi or trend extrapolation, although backcasting might often be the more suitable method, for example when creating long-term strategies (Thorén and Vendel, 2018). It seems that an important reason for the infrequent use of backcasting in business management is the lack of knowledge of real cases.…”

“…Related to this lack, Thorén and Vendel (2018) highlight that more systematic empirical mapping and studies on the advantages and shortcomings as well as on managers' experiences with the combined application of foresight and strategy tools in a VUCA environment would be needed. In corporate sustainability studies, foresight and backcasting have been indicated as approaches that can facilitate managers to make such decisions which do not restrict the choices of future decision-makers (Thorén and Vendel, 2018). Furthermore, a framework for strategic sustainable development (FSSD) has been introduced for backcasting from visions framed by a definition of sustainability.…”

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“…Likewise, in explaining lag between change forces and their subsequent effects (Sterman, 2001). This process sometimes takes the form of "backcasting" (Robinson, 1990), that is, filling in backward from a potential future outcome in order to show how the present may happen to reach that outcome, including actions innovators may make to bring it into being if they have the institutional or industry power to do this (Thorén & Vendel, 2019). Backcasting therein illuminates necessary decisions, resources, capabilities, (and in this context, design innovations) required to reach towards a specific future end-state.…”