New Scenario Planning

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Scenario Planning

Approaches inStrategy Excellence


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Scenario Planning

General Informa tion

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Table of Contents

1. Introduction 4

2. Purpose 5

3. Scope 9

4. Objectives 12

5. Definition of Terms 13

6. Roles & Responsibilities 18

7. Key Principles 20

8. Timing 25

9. Description of Process 26

10. Scenario Pitfalls 32

11. Key Performa nce Indicators 38

12 References 39


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1. INTRODUCTION

The new millennium has been m arked by inc rea sing uncertainty and rap id ly

accelerating change in the business environment of many organizations.Ma jor change drivers in the ma c ro e nvironm ent inc luding, continuing

g lob a liza tion, fast tec hnolog ica l cha nge , inc rea sed liquid ity of wea lth and

fundamenta l changes in trad itiona l va lues and cultura l structures a re w ell

known. How ever, as d rivers in the ma c ro environm ent interac t w ith e ach

industry s ow n trends and unc erta inties, the range o f ima g inab le futures for

ind ividua l firms has g row n ma nifold in co mparison to ea rlier de cades.

In a world w here unce rta inty and change preva il, stra teg ic p lanning w ithout

well-grounded me thodolog ies and frameworks for assessing the future has

bec ome imp ossib le. Above a ll, strate g ists and business p lanne rs nee d to

lea rn to d isting uish a mo ng the d ifferent kinds of unc erta inties. They ha ve to

be com e c onfide nt in naviga ting unc ertainty.

No o rganiza tion ha s the luxury of loc king into a sing le view of w ha t the future

ma y loo k like and plac ing a ll its bets on that outc om e. The level of g lob a l

ec onomic interde pe ndenc e, ad vance s in tec hnolog y, and c hanging

business mo dels a re increa sing com plexity and hence unc erta inty for all

orga nizations. Those tha t fa il to a dapt to the new rea lities will stumble and

ultima tely fail; those that are a ble to respond quic kly and c onfidently, and

mitiga te threa ts or seize opportunities, will thrive .

As such, business p lanners nee d new too ls and method olog ies to help de a l

w ith unc ertainty in the strateg y proc ess. Scena rio p lann ing d istinguishes itself

from othe r more t rad itiona l approa ches to stra teg ic p lanning through its

explic it a pp roa ch tow ard a mb iguity and unce rtainty in the strate gic

question. There a re o the r planning tools and ana lysis fram eworks as well tha t

a re useful d uring times of unc erta inty. Scenario p lanning a llow s orga niza tions


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to p lan for an unce rta in future, enabling the m to reac t with g rea ter spee d

and confidenc e.

2. PURPOSE

Scena rio p lanning p rovides a me ans for ordering perce p tions about ho w the

future m ay play out a nd d ete rmining w hat stra teg ic dec isions tod ay offer the

best c hance of success tom orrow . The process cha llenges ma nage ment to

revisit its assumptions about its industry and consider a wider range of

possib ilities about where its ind ustry ma y he ad in the future. This explora tion

results in a b roa der, mo re innova tive view about future g row th opportunities

and risks.

Importantly, the point of scenario planning is not to predict the most

probable future. Rather, the objective is to develop and test strategic

c hoices unde r a variety of plausible futures. Doing this exercise proactively ---

essentially, rehearsing for multiple futures --- strengthens an organizations

ability to recognize, adapt to, and take advantage of, changes in the

industry over time.

Alternative projec tions fac ilita te c om paring a nd c ontrasting what could

unfo ld und er d istinc t cond itions and assumptions. Scena rios a re pla usib le in

tha t there is, or should be, som e d eg ree of evidenc e to supp ort the

projec tions they c onta in. Scenarios serve a va riety o f p urposes, particularly in

strate gy relate d p roc esses:

1. Strategy developmentImproving assumptions behind planning is the most obvious use of

scena rios. Scena rios rep resent p ic tures of possib le future outc ome s

ba sed on b oth tod ay s fac ts and on a ssump tions of w hat c an b e

extrac ted from the trends tha t c an be ident ified in the p resent. They

are descriptions of possible futures and are not forecasts.


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Scenarios a lso serve to c hallenge c onventiona l thinking . Muc h of

todays business life is hec tic and mo st m ana gers time is spent o n

routines. Co nseq uently, it is c om mon to extrapola te p ast expe rienc eand to assume the future as a continuation o f the p resent. The central

ob jec tive in na rra ting sc enarios is to expo se the dangers of assuming

tha t the future w ill be a simp le continuation o f the p resent trend s.

2. Strategy evaluationIn add ition to using scenarios as a sta rting p oint when drawing up new

strategies, scenarios are useful for testing the robustness of a

company s strateg ies und er eac h scena rio. Also, risk assessments of a

com panys business portfolio a nd ind ivid ua l projec ts can be m ade b y

testing these under different scenarios.

3. Basis for early warning systemMa ybe the m ost inte resting app lica tion of scenario p lanning is to use

the exercise a s a basis for early wa rning systems. By conc entra ting on

critical uncertainties and identifying and analyzing central influencing

factors, it is possible to further identify leading indicators and signposts

tha t should b e m onitored and tha t should func tion as the basis for an

early wa rning system. In a similar fa shion scena rio ana lysis can b e used

for ide ntifica tion of c ritica l information needs in g ene ra l.

4. Organizational lea rning At the ind ividual level As a cognitive device: A set o f sc ena rios is a highly eff ic ient d a ta

orga niza tion to ol. Sto ries a re effic ien t in giving ma ny d ifferent b its

of information a mutua l conte xt, thereby making the c og nitive

aspe c ts of a ny situation more m ana ge ab le to d ea l with.

As a perception device: As ind ividua ls, peop le see c erta in th ingsand overloo k others based on their existing m ental mo dels and


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resulting expec ta tions. The scena rio p roc ess inc reases the rang e

of wha t partic ipants see and expa nds their me nta l mod els.

As a cognitive reflection tool: The scena rio p roc ess he lps peoplethink throug h idea s gene ra ted in the stra teg ic conve rsa tion mo re

effectively.

At the g roup level As a rea dy-made language p rov ider, assisting the strateg ic

conversation across a wide range of partly conflicting views.

As a conversa tiona l fac ilita tion vehic le: Scenario p lanningprov ides an organized way of d iscussing releva nt a spec ts of the

business in an organizational context.

As a vehicle fo r menta l mod el alignment, which in turn p ermitscohe rent strategic ac tion.

While the c onstruct ion o f com posite strate g ies from strate g ic op tions canno t

be based directly on scenarios, scenarios and scenario-based techniques

c ould be used to selec t a nd eva luate new or existing strate g ies. The same is

true for the deve lop ment of visions. It is fundame nta l to strate g ic

ma nagement tha t visions, goa ls and resources and c om pete nc es a re in line

with the business environme nt. Scenario tec hniques can b e useful in

deve loping a stra teg ic vision tha t c rea tes stretc h, and thus the energy

nec essary to keep the o rganiza tion going.

Strate gy imp lem enta tion is just a s important a s strate gy deve lopme nt (if not

mo re so). Without a goo d imp lementa tion stra teg y and e ffec tive

imp lem entation, strate gy de velop ment will be nothing more than an

intellec tual exercise. Prac tic a l imp lementat ion doe s not ma ke m uch use of

scenarios, although scenarios and visions can function as guidelines.

How ever, in the develop ment of the imp lem enta tion stra teg y in terms of

orga nizationa l need s, op erat ions design and so o n, sc enario tec hniques a reas useful as in the developme nt o f c orpora te or business strateg ies. Fina lly,


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scena rios c an b e useful in the eva lua tion of the com panys p rog ress and

c ourse o f ac tion. Are w e he ad ing in the righ t d irec tion, g iven the most

p rob ab le b usiness con text scenarios and the ir a lternatives? is a question tha tshould b e a sked mo re freq uently in many orga niza tions.

PLANNING SITUATIONS WHERE SCENARIOS ARE USEFUL

How eve r, there is no universa l scenario p lanning a nd ana lysis me tho d.

Instea d , there are a large number of different te c hniques and m etho ds for

gene ra ting and using scenarios in p lanning a nd d ec ision-ma king contexts.

From a process standpoint, scenario planning has the additional benefit of

p rom oting high levels of o rganiza tiona l lea rning and collaboration w hich a re

not a s de ep ly emb ed de d in othe r strate gic p rac tic es.


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REINFORCING BENEFITS OF SCENARIO PLANNING

3. SCOPEIdea lly, sc enario p lanning is used in rap id ly chang ing environme nts, prior to

the d evelopm ent o f a strate gic p lan, or as a supp lem ent to / valida tion o f a

c om pany s strate g ic p lan. Senior mana gement insight a nd d isc ussion, a s well

as insightful background information is req uired .

Scenario p lanning is large ly foc used on answering three questions:

1. What co uld hap pe n?2. What would b e the impac t on o ur stra teg ies, p lans and b udg ets?3. How should w e respond?

Scenario p lanning works a longside o the r strate g ic p lanning techniques to

ensure tha t stra teg y takes into account the c onte xtua l environm ent in whichit has to succ ee d.


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THE ROLE OF SCENARIO PLANNING WITHIN BUSINESS STRATEGY

Befo re embarking on a scenario planning exerc ise, it is essen tia l to b e c lea r

about the issue to b e a ddressed , and then to d efine the a pprop ria te sc op e

and time ho rizon fo r the sc ena rios to be c onstructed . There a re four b roa d

typ es of scena rios:

1. Social. For exam ple, wha t a re the imp lica tions of inc rea sing ob esity?2. Economic. For examp le, how will the rap id e c ono mic g row th of China

and India c hang e g lob al ma rkets?

3. Political. For exam ple, how will changes in U.S. hea lth care polic ya ffec t the ec onom ics of sma ll businesses?

4. Technological. For example, how will the inc reasing use o f smartpho nes imp ac t de sktop and lap top comp uter use?

Answering the follow ing questions w ill help d etermine whether a scenario

p lanning p rojec t ma kes sense and ho w to d efine the ob jec tives and scop e:


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What issues or d ec isions a re we trying to eva luate? Is there a high d eg ree of unc erta inty abo ut the future? If yes, ca n

scena rio planning be an effec tive tool? What is the time horizon for ma king dec isions and then exec uting

them?

A c lear definition of the business/ dep artme nt b oundaries inc luded in the

p lanning is a lso essentia l. The key d elive rab les of the p rocess inc lude:

Defined key p lanning issue(s) List of a greed upon p lanning a ssumptions List o f key t rends and forces Artic ula ted a lternative sc ena rios Ident ified key aspec ts of a lternative strateg ies Comp leted ac tion p lanning te mp lates (value c hain ac tions for

ea ch scena rio)

Identified robust strategies that work in all scenarios andcont ingenc y plans tha t are unique to each scena rio

Ident ified triggers sources to monito r and trigger points

The normal perspec tive for most o rganiza tions is from inside to out. They sta rt

by loo king a t the ir ow n orga niza tion and then a t c ustom ers, comp etitors,

structures and technology within the ir ow n a rena . This approa ch works as

long as its ra the r narrow outlook is approp ria te .

Scena rio p lanning beg ins with an outside-in view in o rder to identify and

p lan for the e xte rna l influences and unc ertainties tha t w ill have a significant

imp ac t on the orga niza tion s cho ic es. Scena rio p lanning sta rts in the outer

c irc le w ith the contextual environment that will shape choices.


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Outside In Approach

The scenarios tha t result co nnec t the se three environme nts in an eng ag ing

stra teg ic conve rsa tion abo ut unc ertainty and a lternative futures.

4. OBJECTIVESScena rio p lanning can g rea tly enhance an organiza tion s ab ility to ta ckle a

d iverse set of strate g ic business p rob lems, ma ny of which ha ve b ecom e

mo re challeng ing as the b usiness c lima te be c om es eve r more c om plex,

dyna mic and unce rtain. Among the ob jec tives of scena rio planning are:

a ) To c rea te a mo re rob ust a nd susta inab le long -term stra teg y based ona set of a ssumptions about w ha t idea s work ac ross a range o f

scenarios;

b ) To he lp ma ke c lea r-cut , well-de fined strate g ic dec isions undercond itions of uncertainty;

c ) To provide a basis or testing the imp ac t o f c urrent and p rop osedstra teg ies on the performance o f the organizat ion in the future;


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d ) To help orga niza tiona l lea ders sort through c om plexity b y iden tifyingpatte rns of c hange , ena bling organiza tions to a c t more explic itly and

holistically;e) To c ont inuously imp rove and innova te in and by ant ic ipa tion o f the

market;

f) To d evelop orga niza tions tha t can think flexib ly and c rea tively; andg) To a lign key sta keho lde rs in support of a sha red vision.

5. DEFINITION OF TERMS

Scenarios

Scena rios a re d esc rip tive narratives of p lausib le

a lterna tive p rojec tions of how a stud ied system will

evo lve in a spec ified time frame .

Scenario Planning

Scenario p lanning is the com bina tion o f scenario

ana lysis and strate g ic p lanning. It is p lanning a ime d a t

systematically exploring alternative lines of

deve lopment in the outside world a nd the ir

consequenc es for your own b usiness, ind ustry or area

(the system being stud ied ).

Focal Issue or

Question

The issue o r question tha t the scena rio thinking / p lann ing

proc ess seeks to address.

Emerging Issues

Eme rging or po tential issues a re ones tha t ha ve not yet

co me to the fore, but have the p otential to bec ome

problems that the c om pa ny will need to ac t on.

Potent ia l future issues a re often iden tified through

sc ena rio p roc esses.

Mental Map (or

Mental Model)

A set o f assump tions tha t in aggreg ate b ec om es a

frame work for how a person or group interac ts w ith the

world and the ir business environment. Menta l maps a re

usually implicit, i.e. often unstated.

EPISTLE

The letters of the word sta nd s for the six a rea s tha t a re

imp ortant to c hec k when trac ing chang es in the

surround ing world .

Econom y and m arket Politics


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Institutions and organizations Soc ial c hang es

Tec hnology

Leg al cha nges Ecology a nd e thic s

Event

A future eve nt is som eth ing that ma y or may no t

hap pe n in the future. Scena rios c an be c rea ted by

ge nerating and c lustering future events.

Official Future

The e xplic it a rticulation o f a set o f com mo nly held

beliefs about the future environm ent tha t a g roup ,

orga niza tion , or industry imp lic itly expe c ts to unfold .

Onc e a rticula ted , the o ffic ia l future c ap tures an

orga niza tion s sha red assumptions --- or me nta l ma p.

Driving Forces

Force s of change outside the orga niza tion tha t w ill

shape future d ynam ic s in pred ic tab le and

unpred ic tab le ways. Driving forces can e ither be

pred ete rmined eleme nts or uncertainties.

Futures Study

All type s of stud ies c onc erned with the explora tion and

ana lysis of future sta tes beyond norma l budget horizons

could be name d futures stud ies. Tra d itiona lly, the te rm

app lies to stud ies with a 1030-yea r horizon.

Normative

Scenario

A normative sc enario is one tha t d esc ribes a desired (or

undesirab le) future. The purpose of norma tive sc enarios

is som et ime s to explore the best-case future and

possib le roads to tha t future. The purpose c ould a lso be

communicative.

Pitfalls

A p itfa ll is a trap you c ould fa ll into . There a re ma ny

p itfa lls in scena rio work. There a re p rejud ic es, wishful

thinking and b lind spots tha t c ould lead to lousy

ana lysis. And several othe r traps lurk in the fie lds of

p roc ess design, selec tion o f p articipa nts,

communic at ion format and the othe rs.

Scenario Learning

Scena rio lea rning is the use o f scenario tec hniques to

inc rease sha red und ersta nd ing s of systems dyna mic s,

future develop ments, unce rta inties and so o n. Sc enario

lea rning is by na ture explorative.


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Forecast or

Prognosis

A forec ast is a d esc rip tion o f the m ost p rob ab le future

und er p resent c ond itions. Forecasts a re useful in the

short term, b ut rap id ly lose the ir significa nc e in the

longer term a s they d o not take future events intoaccount. Assessme nts of e cono mic cond itions a re

com mo n examples of forec asts.

Foresight

While forec ast is used as a te rm for p red ic tions,

foresight is a te rm tha t d esc ribes a mo re open

perspec tive o n futuristic th inking . Foresights focus on the

identifica tion of p ossib le futures, potentia l issues,

tendenc ies, and unc erta inties, often using scenario

metho ds. Foresight is sim ilar to the term p rospec tive

analysis.

Prospective

Analysis

This te rm is used by Miche l Godet and others to

designate a multiplicity of possible futures. Like many

othe rs, Godet is c ritica l of the possib ility o f ma king

forecasts and probability-based assessments of the

future. Prospec tive a na lysis genera tes scena rios based

on a series of suppositions about the right p a th to

choose.

Trends as opposed

to Fads

Trend s a re long -term, often irreversib le, chang es tha tfreq uently take p lac e ove r a number of yea rs and

which often c reep up imp ercep tibly. The e ffec t o f a

strong trend on a phenomeno n ca n often be me asured

and forec ast.

Fads a re m ore short-term shifts, for example in interests

and op inion. The d ifferenc e b etw een trends and fad s is

similar to tha t between c lima te a nd wea ther.

Utopian Scenario

A utop ian scenario is a normative b est-ca se sc enario

tha t lac ks in p lausib ility and the refo re lies beyo nd the

space of possib le, c red ib le futures. Utop ia n scenarios

are often c onflic t-free and rela tively boring . Tha t is a lso

the rea son why they a re so ra re in lite ra ture.

Scenario Plots

Key p oints ab out e ac h scena rio b ased on a na lyzing the

driving forces. Sc ena rio p lots a re develop ed by

ana lyzing key sta keho lde rs.

VisionA vision is a vivid p ic ture o f a desired future, o ften

expressed in a short a nd p ithy way. If it is to work as a


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strate g ic vision in a n o rganiza tion, it must b e w ell

anchored in the hea rts of those who are to ma ke it

com e true. Every scena rio-p lanning p roc ess should b e

connec ted to a vision of wha t you want to ac hieve.

Contextual

Analysis

Contextua l analysis is a te rm fo r all sorts of a na lysis of

the orga niza tion s exte rna l environment, the o utside

world.

Base Scenario

A ba se scena rio g ives a broad p ic ture o f wha t we can

take fo r g ranted in the future. It summ arizes gene ral

assump tions abo ut the future o n which a numb er of

contrasted a lternative scenarios c an b e built. Thus, a

base sc enario is a very broad ly and q ua lita tivelydesc ribed forec ast where built-in unc erta inties a re

hidden. Those uncerta inties can, how eve r, be

highlighted in a lternative scenarios.

The base sc ena rio g ives ind ica tions of the essentia l

ac tions tha t orga niza tions nee d to ta ke in order to be

ab le to c op e with the future.

Qualitative

Scenario Methods

Qua lita tive m etho ds a re b ased on soft d ata (that is,

methodsnon-quantifia b le va riab les) and rea soning . The

purpose is often to identify and analyze systemsrela tions, key ac to rs, uncerta inties and the like.

Qua lita tive me thod s a re ne cessary in med ium to long-

range p lanning. Sem i-qua lita tive metho ds such as

trend -imp ac t and c ross-imp a c t ana lyses a re c om mo n

in scenario p lanning . By semi-qua lita tive we m ea n

me thod s whe re for instanc e relations a re quant ified on

the basis of qua lita tive reasoning .

Quantitative

Scenario Methods

The purpose of q uantitat ive me thod s is to get outp ut

data in numb ers. Qua ntitative me thod s are ba sed on

the a ssump tion o f ca usa lity that c an be ca p tured in

regression o r systems models. Qua ntita tive sc ena rios

could o ften be m od eled in sprea dshee ts or desktop

simula tion p rog rams. Quantita tive me thod s a re often a

nec essary co mp lement to qualita tive m etho ds in the

sea rch fo r more solid fac ts and figures, and in the

explorat ion o f the future trajec to ries of p resen t trends

and pa tterns.


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Back-Casting

A scena rio tec hnique w here you sta rt with an imag ined

future a nd then c rea te a pa th to it. The p ath c ould be

construc ted throug h ana lytica l me thod s or throug h

mo re c rea tive me thods such a s future histo ry writing .

Leading Indica tors

Fac tors or signp osts tha t a re d rawn out o f scena rio

stories and tha t should be mo nitored on a n ong oing

basis to signa l cha nge. Lea d ing ind ica tors can b e very

ob vious, such as the passing of a deb ated p iec e o f

leg islat ion, or quite sub tle, like sma ll signs of a g radua l

shift in soc ia l va lues.

Predetermined

Elements

Force s of change tha t a re relatively c ertain within the

releva nt time frame, such as pop ulation a g ing . It is agiven tha t p red ete rmined elements will play o ut in the

future, although how they interac t w ith and impa c t

other variables remain uncertain.

Critical

Uncertainties

Unpred ic ta b le driving forces such as pub lic op inion or

the state of the ec onom y, that will have a b ig imp ac t in

the c ontextual environme nt and / or market c ond itions

but whose o utcomes are highly uncertain o r unknow n in

the p lanning timeframe . The va rious c om bina tions for

how c ritic a l unc erta inties ma y unfold fo rm the b asis of ad ivergen t set of sc enarios.

Scenario

Implications

Insights tha t c ap ture the lea rning from scenarios by

asking wha t c ha lleng es and op portunities would the

orga niza tion fa ce if it we re op erating in each one , and

wha t o p tions wo uld m ake mo st sense in response.

Wild Card

An unexpec ted event , like a revolutionary discovers or

a g lob al epide mic tha t co uld req uire a c hang e in

strate gy. Wild c ards he lp surface ne w uncerta inties andd ifferent c ontingent stra teg ies for future ac tion tha t

ma y not em erge from the more log ica l struc ture o f a

scenario framework.

Dystopian

Scenario

A dystop ian scenario is a rea l nightm are sc enario.

Dystop ian sc enarios a re c om mon in lite ra ture, Orwe lls

1984is one example of d ystop ia in meta phoric a l

format. Dystopian scenarios full of conflicts, such as

soa p op eras, are o ften e xc iting and stimula ting and are

often used as contrasting scenarios to norma tive and


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mo re uto pian ones.

ActorAn ac to r is an ind ividua l, g roup , orga niza tion o r eve n a

na tion tha t ha s an inte rest in the issue or system stud ied .

Conflicts

Co nflic ts can oc cur as a result of ac to rs c onflic ting

inte rests. They are o ften a strong d rive r in soc ia l chang e.

Potent ia l co nflic ts could be used as an insp ira tiona l

source in scenario develop me nt. It is a lso important to

consider important c on flic t d ime nsions in ea ch scenario

of a scena rio set .

6. ROLES & RESPONSIBILITIES

6.1 Scenario Planning Facilitator

Spea rheads the session for scenario p lanning partic ipants. Draws out partic ipan ts thoug ht p roc essing ab ilities to ena ble them

to think outside the box.

Ma na ges and c ontrols the session so tha t d iscussions evo lve freely. Defines and em pha sizes to partic ipa nts what is to be expec ted from

the scena rio p lanning e xercise a nd what the va lue for them might

be.

Refrains from ta king part in the d isc ussion but g a the rs info rmationand rec ords idea s of p artic ipants.

Draws out the com mon themes from among the sc ena rios andworks with partic ipants to esta b lish e ffec tive c onc lusions.

Ana lyzes info rmation about the purposes, desired outcom es, workcontext and p artic ipa nts to d ete rmine the b est ap proac h.

Designs me etings to ena ble the g roup to succee d a t its p urposesusing approp ria te structures, p roc esses and seq uences.

Esta b lishes g roup c lima te , norms and roles w ith the g roup to helppa rtic ipa nts do their work and c rea te a produc tive environment.

Crea tes and imp lem ents structures and p roc esses to acc om plishtasks and mee t the o b jec tives of the scena rio p lanning e xerc ise.


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Intervenes to m anage g roup dynam ics, to enforc e norms and toinfluenc e what memb ers a re d oing or how they a re doing it.

Naviga tes dec ision p roc esses throug h methods chosen a nd theesta b lished orga niza tiona l hierarchy o r dec ision structure.

Ensures follow -up a c tion rela ted to p rod uction a nd d istribution ofsession rec ord, results, c ommunica tion w ith sta keho lde rs and

imp lementa tion of de c isions.

6.2 Management

Ensures ac tive c om mitment and invo lvement in a ll sta ges of thescena rio p lanning p roc ess.

Ide ntifies and dec ides wha t questions they wish to e va luate in theprocess.

Provides va luab le insights and idea s in c ra fting releva nt scena riosand / or voting o n the options offered .

Oversees the implementa tion of ac tion plans ac c ompa nying thescena rio p lanning p roc ess.

Advoc ate s c rea tive thinking am ong pa rtic ipants by ta king a lea drole in thinking outside the b ox .

Takes an ac tive role in iden tifying and monito ring lead ing ind ic ato rs. Ensures tha t information and da ta c ollec ted for the session a re

relevant, time ly and ac curate .

6.3 Scenario Planning Participants

Out lines streng ths, weaknesses, opportunities and threa ts tha t theorganization is likely to face

Ide ntifies trend s and pressures tha t w ill have the mo st impac t o n theorganization or department.

Reviews the forces to de c ide wh ich a re most important in rela tion tothe question asked, whic h a re mo st c ertain and likely to oc cur in


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Scenario Planning

any future p lans, and which a re m ost unc ertain and d ifficult to

predict.

Narrow s the forces to choo se the o ne tha t is mo st unc ertain and theone tha t is mo st important.

Out lines possib le strateg ies from the sto ries tha t ha ve b eende veloped that w ill help the orga nization to respo nd to c hang es

should the future de velop as out lined in the sto ries.

Outlines ind ic a to rs tha t they w ill use to review the scena rios todetermine if the future is develop ing as desc ribed .

7. KEY PRINCIPLES

7.1 Scenario planning is not meant to be an accurate science; it doesnot produce forecasts.

Nobod y can p red ic t the future. While the future is uncertain and

unknowable, scena rio p lanning helps you visua lize it. Past trends a re o nly

va lid in rela tively sta ble environments and , while they can give

consideration to potentia l ma jor changes they will only do so if you

inc lude them.

7.2 Scenario planning requires a wide range of potential inputs toprovide a useful basis for decisions.

This may ac tua lly mean extensive desk research, horizon scanning or

inte rview s, or a mixture o f all three a nd the p resenc e a t the scena rio

p lanning sessions of externa l peo ple. Scenarios tha t a re built by only

insiders tend to bec om e introverted and pessimistic , with a foc us on

prob lem s ra the r tha n op portunities.

7.3 Scenario planning is most useful when it is done in the context of anunderstanding why it is be ing conducted.

Is it to p rovide a c ontext for dec isions; or a s a part o f buildingmanagement skills? In the first case, it is important that the supporting desk


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Scenario Planning

resea rch in the trends is in p lac e; in the sec ond case, it may be mo re

imp ortant to d iscove r wha t is in the partic ipants hea ds.

7.4 Scenario planning is about using the right tools to be able to thinkstrategically.

Scenario p lanning is by na ture a multi-disc ip lina ry field , dea ling w ith

extremely c omplex issues. The mission is to develop maps of the p resent

and the future tha t a re releva nt to m ana gem ent. To d o tha t there is a

need fo r me thod s and too ls to:

Ide ntify em erging trend s and potent ia l issues Ide ntify their conseq uenc es and c onc eivab le rea c tions to them Ge nerate alternative sc ena rios and ima ge s of the future.

Basica lly, sc enarios a re based on three com ponents where d ifferent skills

a re req uired :

Ga the ring informa tion: Intuition Information analysis: Logic Modelling the future: Crea tivity

There a re a number of to ols for informa tion ga thering , ana lysis and futures

genera tion. Those me thod s c an b e d ivided in seve n g roup s, ba sed on

the ir p rimary c ha rac te ristics:

Med ia-based method s Interview-based methods Timeline-ba sed m ethod s Ge nerative, intuitive m ethods Acto r-oriented m ethod s Conseq uence -foc used m ethod s Systems methods

7.5 Scenario planning involves thinking in dramas.


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Scenario is a term tha t o rig ina tes in the thea tre; a scenario is a b rief

desc rip tion o f the course o f events in a p lay. Fundame nta lly, scenario

thinking me ans view ing the w orld (or the industry) as a g rea t d rama withva rious more o r less c ontrollab le force s and a number of players trying to

influenc e the plot fo r their ow n goa ls and intentions. A com plete sc ena rio

should desc ribe deve lopm ents from now until a g iven time (ra ther tha n

being a mere sna pshot the future. It must b e c onsistent, not full of inner

contradictions.

With the d rama perspec tive, at e ach point in time the scena rio should

g ive a desc ript ion o f:

The players: the p rinc ipa l pe rsons who a re moving the ac tionforward (WHO?)

The events: what is ha ppening (WHAT?) The time when it is ha ppening (WHEN?) The scene where the events a re ta king plac e (WHERE?) Prop s: wha t p rop s are need ed and in what w ay a re the ac tions

carried out (HOW?)

Motives: why is this ha ppening (WHY?).

7.6 Scenario planning helps organizations overcome the tendency tooversimplify the future by planning for multiple futures.

Scenario p lanning a vo ids ma king sing le, falsely confiden t p red ic tions

based on to days mo de l or view of the wo rld. Ra ther, they c onsider

multip le hypo theses for how the mod el might evo lve a long more varied

d imensions. Scenarios b uild o n w ha t is known, but a lso inc orporate the

uncertainties and yet-to-emerge issues tha t m ay have a s muc h o f an

impac t a s the known trends. Each scenario c onsiders a d ifferent set of

outc om es for these uncertainties, a llow ing the m to b e manage d

proactively.


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Scenario Planning

7.7 Commitment from senior management and key decision makers isimperative to ensuring a successful scenario planning.

Scena rio p lanning can lead to bette r dec isions for the future by involvingsenior ma nagement a nd dec ision m akers in lea rning a bout the forces

which shape the future --- from an unde rstand ing of p resent beha viors

and a ttitude s, pa tte rns and trend s. They cha lleng e d ec ision makers to

think the unthinkab le , to suspend d isbelief, to let g o of long -held

mindsets and assump tions and let the ir imag ina tion explore ne w horizons

and c onsider possib le futures.

7.8 Think in futures.In orde r to b e a go od scenario th inker it is nec essary to d eve lop the

capab ility to think in te rms of futures. Som e p eo ple a re na tural futures

thinkers. They c onsta ntly think in terms of where will tha t lea d , what is this

a sign of and so on. As soo n as they rec og nize a new phenom enon they

sta rt to spec ula te o n far-rea c hing c onseq uenc es. Such peo p le a re o ften

imag ina tive, rec ep tive and image-thinking personalities. They are born

futures thinkers. But in fact most people can improve their futures thinking

capab ility with the help of a few tec hniques and som e training . Som e o f

the m etho ds tha t c ould d eve lop futures thinking inc lude :

Trend extrapola tion:This is useful in the p resent-to-future mode.Ide ntify p resent trend s and extrapolate them into the future.

Med ia sc anning:To scan m ed ia is a pow erful way to identify trend s(or generate hypo theses) and to stimulate c rea tivity, bring in ne w

pe rspe c tives and idea s.

Guruing:Guruing invo lves simp ly asking experts for their op inions ofthe future.

Delphi surveys:Delphi surveys a re a more systematic way to c ollec texpe rt op inions about the future. Experts are asked to g ive spec ific

op inions on w hen or with wha t certainty a c ertain event w ill oc cur.


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Future history:To w rite future histo ries is a p owerful way to c rea teimag ina tive sc enarios. The bac kwa rd look also stimulate s c rea tivity,

ma kes it e asier to identify possib le future events, ac to rs moves andso on. It is less we arying tha n m ore a nalytica l approa ches. The bra in

likes to ha ve fun, and writing futures histo ries is usua lly fun.

Hea d lines and poster produc tion:Similar to futures histories, butinstead of writing lette rs or a histo ry o f the future, you make

sna psho ts in the form of poste rs, hea d lines and sho rt a rtic les.

Intuitive t imelines and sta tistica l time series:Time lines c an be d rawnintuitively but c an also be c om pute d through sta tistica l me thod s

based on histo rica l da ta . The first method is usua lly an effec tive way

to c larify own idea s about future courses.

Event p rod uc tion:To think in terms of future events is a good sta rtingpoint fo r a more thorough ana lysis. Future events a re a lso ne c essary

to turn a limited futures p lot into a vivid sc enario d esc rip tion.

7.9 Think in uncertainty.To m anage unc ertainty has been c onsidered the key ma nage rial task.

And scena rio p lanning is a m etho dology designed to ha nd le unc ertainty.

There a re often seve ra l rea sons why a dec ision environme nt is perceived

as unc erta in. In its most simp le fo rm unc ertainty d erives from lac k of

info rmation o r lac k of a nalysis and thinking . In such c ases unc erta inty c an

be red uced by simp le intelligenc e and it is possib le to ma ke forec asts

goo d enough to base dec isions on. The following a re the m ost c om monly

used methods for thinking in unc erta inty:

Analogies:To use histo rica l or othe r ana log ies is ofte n a fruitfulme thod when w e a re d ea ling w ith non-linea r c hang e a t high level

of unc erta inty, for insta nc e w ithin eme rg ing ma rkets or ind ustries.

What o the r ind ustries ha ve gone throug h something similar? Has thishappened before? Wha t sim ilarities a re there be twe en the e arly


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2000s and the early 1930s? If this is an a nima l, wha t anima l is it? And

wha t is it be com ing?

Complexity plotting and uncertainty analysis:Trying to identify thecom plexity and speed in d ifferent seg ments of the business

environme nt is often a go od sta rting p oint fo r ana lysis.

7.10 The set of scenarios developed for an organization should includelinks to existing orga nizational mental maps and assumptions.

A goo d sta rting po int fo r a scena rio p rog ram is an exploration into wha t

ma nagers d irec tly conc erned believe is c urrently go ing on in their wo rld.

This leads to the identifica tion of the organiza tion s strate g ic agenda.

7.11 In developing scenarios, attention must be focused on relevance,novelty and substance.

Releva nc e rela tes to the inc lusion of current issues and situa tionstha t c an be linked to current mental mo de ls and assump tions of

ma nag eme nt. It p rovide s a bridg e to the future.

Novelty come s from the inclusion of new a nd ama zing idea s andperspec tives tha t cha lleng e existing menta l mo de ls and strate g ies,

but are plausib le --- they could ha ppe n.

Substa nc e relate s to the c red ib ility and quality of the underpinningana lysis tha t c ont ributes to unde rstand ing of the p resent and to the

logic and inte rna l consistency of the pa thwa y from the p resent to

the future within ea c h scena rio.

8. TIMING

Scenario p lanning requires inte rest and com mitme nt to new ways of thinking

by lea ders, top ma nagement, and senior dec ision-ma kers --- and for them to

explain and p rop agate tha t interest to o thers.


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Scenario Planning

It may ta ke som e time to c rea te a sc enario, and even m ore to arrive a t a

c om prehensive set o f sc enarios. It can be quite t ime-consuming to a na lyze

va rious policy op tions within the c on text of one o r more scena rios, espec ia llysinc e this is usua lly a g roup exerc ise. The d urat ion o f a scena rio planning

exercise usua lly ranges from half-day frame-breaking sessions invo lving

selec t top m anag ement te am mem bers to lengthy 6-12 month visioning

exercises involving greater numbers of different stakeholders.

In te rms of t ime horizon, if we loo k just a few yea rs ahea d, there w ill prob ably

be very little d ifferenc e. If, on the o ther hand , we look 20 years ahea d muc h

ma y have c hange d. The unc ertainty is huge , how eve r, perhap s too huge to

find answe rs tha t c an g ive any guidanc e for the o rganiza tion . The t ime

horizon for sc enarios must b e short enough to c rea te scenarios tha t a re

proba ble, but long enough for us to imag ine tha t imp ortant c hanges with a n

imp ac t on the future b usiness c an take plac e.

9. DESCRIPTION OF PROCESS

The scena rio p lann ing p roc ess is a struc tured p roc ess tha t results in key sto ries

the organiza tion can use to desc ribe p ossib le futures. To b e effec tive, the

scenarios tha t a re d evelop ed must resona te w ith p eo ple. The sto ries have to

spea k to the rea ders to he lp them d eve lop responses to the scena rios tha t

c an m ove the orga nizat ion forwa rd.

While the re is no universa l proc ess for cond uc ting a sc enario p lanning

ac tivity, the follow ing outlines the key steps invo lved in the approa ch:


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SCENARIO PLANNING PROCESS

9.1 Identify the key decision or foca l issue to be addressed and crea te a

group. Managers de c ide wha t q uestions they w ish to eva lua te in the

scenario p lanning p roc ess.

Without a c lea r foc us, the scenario p lanning p roc ess leads tovague results tha t w ill not help the organiza tion c op e with

change.

Foc us of the dec ision should be a stra teg ic conc ern for theorganization.

It is a lso imp ortant to form an approp ria te g roup for steering thescena rio p lanning p roc ess and for do ing m uch of the d ra fting

work. Questions to consider in forming the g roup inc lude :

What is a goo d size o f the g roup ? Should an outside c onsultant lead the p rojec t o r are there

peo ple ma ste ring the p roc ess ava ilab le inside the

organization?


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Should o utside expe rts be invited to jo in? How is it p ossib le to ge t d ifferent view s rep resented in the

group? How should the group be set up to e nsure a n innova tive and

produc tive a tmo sphe re?

9.2 Identify the key forces in the environme nt.

As in strate g ic p lanning , pa rticipa nts out line streng ths,wea knesses, opportunities and threa ts tha t the o rganiza tion is

likely to face.

The ana lysis covers both inte rna l and external fac to rs tha t mayhave an imp ac t on the o rga nizat ion.

At th is sta ge a com bina tion o f workshops, inte rview s and deskresea rc h should be used .

9.3 Identify the driving forces.

Based on the e nvironm enta l scan com pleted in the p reviousstep, participants identify those trends and pressures that will

have the mo st imp ac t on the orga nizat ion o r de pa rtment.

Driving fo rces usua lly com e from one of five c a tegories: soc ia l,ec onomic , political, tec hnological and e nvironmental.

9.4 Rank the forces by importance and certainty.

Partic ipants review the forces to dec ide w hich a re mo stimp ortant in relation to the q uestion asked , which a re mo st

certain and likely to oc cur in a ny future p lans, and which a re

mo st uncertain and d ifficult to p red ic t.

The proc ess of ranking the forces enables partic ipants to identifythose fo rc es tha t a re likely to have a n imp ac t on the

orga niza tion in a variety of futures and those that a re moreunlikely to occur or to influenc e how the o rga niza tion deve lop s.


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High-imp ac t events tha t a re nevertheless highly unc erta inrepresent the c ornerstones of scena rios.

Ana lyze how the d ifferent unc erta inties and t rends a reinte rrela ted . A useful too l at th is sta ge is to c rea te a c orrela tion

ma trix for at least the key uncertainties id entified and the trend s

with the highe st perc eived imp ac t.

9.5 Choose the main themes or scenario logics for developing the

scenarios.

Partic ipants na rrow the forces to choose the one tha t is mo stuncertain and the one tha t is mo st imp ortant.

Both force s form the m atrix tha t w ill de termine the d ifferenttheme s for the scena rios.

Each force should be d esc ribed on a continuum o f op tions toframe the scenario plots.

The proc ess of ide ntifying the two significa nt fo rces c an helppartic ipants avo id thinking in te rms of w orst c ase, best c ase a nd

average scena rios. Instead , they deve lop four unique sto ries to

desc ribe possib le futures.

Ensure tha t the skeleton scena rios a re interna lly c onsistent andeliminate any tha t would not make sense. Furthe r, eliminate

scenarios tha t a re uninte resting o r irreleva nt from the view point

of the focal issue.

9.6 Write and develop the scenarios.

Stories, developed to outline possib le futures, are the c ore idea stha t manage rs should c onsider in making dec isions about future

directions.

The p lots need to c ap ture the ima ginat ion o f de c ision m akerswithout overwhelming them w ith results.


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Pop ulate the sc enarios with da ta on p otential ma rket size,rea c tions of key p layers, financ ia l imp ac t a nd so on.

9.7 Review the implications of the scenarios.

The ana lysis of imp lica tions should revea l we aknesses in dec isionsor p lans and op portunities and threa ts in the future business

environment.

From the stories tha t ha ve b een d evelop ed , pa rticipa nts outlinepossib le strate g ies tha t w ill help the orga niza tion to respond to

cha nges should the future deve lop as out lined in the stories.

Partic ipants look for stra teg ies tha t a re app lic ab le to mo re thanone scenario a s well as strateg ies tha t help if the future yields b ig

surprises tha t a re un likely to be anticipa ted in trad itiona l planning

efforts.

9.8 Identify ways to monitor change by selecting leading indicators and

signposts.

Ident ify signp osts or lead ing ind ic a to rs to a lert the orga niza tion tothe unfold ing of a pa rticula r scena rio.

Choo se high-imp ac t unc erta inties and use results from theimpac t ana lysis in dec id ing for ind ic a tors.

The ind ic a to rs he lp mana ge rs know which strate g ies might workin response to the c hange s the o rganiza tion may experienc e.

9.9 Discuss strategic options.

The strate g ist should d eve lop strateg ies tha t matc h theorganiza tion s visions as well as cha nges in the outside world. This

pha se o ften works on identifying keys to suc cess, suc c ess a reas

that should be c onc entrated on, and also o n ide ntifying areas

tha t the o rganiza tion should mo ve awa y from .


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A ma trix too l that maps a com plete set of op tions against thescenarios c an b e used to systematize the p roc ess.

9.10 Agree on implementation plan.

When the overall strate gy ha s been de termined a conc rete andc lear plan need s to be p ut toge ther. It is ea sy to have idea s but

often d iffic ult to imp lem ent them. The key questions a re:

When? Who? How?

9.11 Publicize the scenarios.

Dissemina tion o f sc ena rios is c ruc ia l for ensuring imp lementa tionand adherenc e to the ensuing strate g ies. Que stions to b e

considered at this sta ge include a t least:

What is the ta rget audienc e? What c hannels c an b e used to rea ch the targe t aud ienc e? What is the m ost effic ient m ethod to g et the a ttention of the

targe t audienc e?

Add itiona l importa nt things to c onsider in the sc ena rio p lanningprocess:

At least tw o scena rios a re ne ed ed to reflec t unc ertainty.Having m ore tha n four has p roven o rganiza tiona lly

impractical.

Eac h o f the scena rios must b e p lausib le. Tha t mea ns tha t the ymust grow log ic a lly (in a c ause/ effec t way) from the p ast and

the p resent .

They must be inte rna lly consistent. Tha t means tha t eve ntswithin a scena rio m ust be related throug h ca use/ effec t lines

of a rgument.


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They must b e releva nt to the issues of concern to theorganiza tion. They must p rov ide useful, com prehe nsive and

c ha lleng ing idea ge nerato rs and test c ond itions aga instwhich m anage ment can c onsider future business p lans,

strategies and direction.

The sc enarios must p rod uce a new a nd o rig ina l perspec tiveon the issues. They must ha ve an e lement o f surprise.

Orga niza tions norma lly make tw o basic mista kes in thescenario p roc ess: They rely on input from too na rrow a g roup

of p eo ple o r they c urta il the p roc ess too ea rly.

10. SCENARIO PITFALLS

10.1 Preparation

10.1.1 Unc lea r purpose

A proc ess may sta rt w ith a n unc lea r purpose. It might , forexamp le, beg in as a na rrow ly based p roc ess invo lving

chiefly expe rts foc using on strategy; then a ll of a sudden

it b ec om es apparent tha t the essential need is for a

broa d involvement of the organiza tion s personnel in

order to inc rea se a wa reness of the need for renewa l.

It should ha ve b een a scena rio lea rning rather than ascena rio p lanning p rojec t.

10.1.2 Woo lly questions

The foc al question for the scena rio planning m ay be toowoo lly. This of ten lea ds to an a ll-em brac ing trac king of

trend s tha t often lea ves mo re spec ific and imp ortant

trends aside.

Later on, when it becom es ob vious tha t som e importanttrend s have b een ignored, muc h of the a na lyzing w ork

based on the trend s has to be redone , and this holds upthe process.


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10.1.3 Inapprop ria te time frame

Most o ften the p rop osed timeframe is too short. The trendsand sc enarios a re to b e used for planning p urposes foronly the ne xt few yea rs.

A t imefram e shorter than five years hinders ob serva tion ofcentral trends; imp ortant c hang es canno t be predicted on

such a sho rt sca le.

At the o ther end of the spe c trum, too long a time fram eoften leads to unfounde d spe culation.

10.1.4 A team with a na rrow p erspec tive

A tea m w hose p artic ipants a ll com e from inside theorga niza tion ofte n te nds to take an insideout perspec tive.

Too muc h a ttention w ill be g iven to their ow n organiza tion

and the field they a re w orking in.

Long -term c hang es in the field ofte n de velop a sconseq uenc es of d riving forces in the e nvironment o utside

it, and these w ill not b e ide ntified .

The c om position o f a p articipa to ry sc enario g roup shouldbe heterogeneous as we ll as ba lanc ed .

10.2 Tracking

10.2.1 Ident ifying trend s not based on ob served c hange

Trend s tha t a re no t based on o bserved c hang es tend tobe either nightmares or da ydreams.

They most o ften oc c ur as a result of a p roc ess-ba sed workwhen very little foc us has bee n la id on c ompletion and

desc rip tion of the t rends.

10.2.2 Too narrow a pe rspec tive

Loo king at t rends on a high enoug h systemic leve l is notsuffic ient g uarantee for a broa d p erspec tive.


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It is often g oo d to use a checklist tha t makes it easier toobserve c hanges in systems tha t a re othe rwise easily

overlooked.10.2.3 Too ma ny trend s

Too ma ny trend s often co me up. Som e peo ple haved ifficulty in turning their a tten tion awa y from trend s tha t

have been ide ntified but tha t a re no t p artic ularly

imp ortant be cause the y have low p red ic ta bility and a low

level of imp ac t on the foc al question.

Som e trend s c an be d riving forces or c onseq uenc es toothe r trend s, and c an therefore be c onsolida ted unde r a

sing le he ad ing .

10.2.4 Not supporting the trends with evidenc e

In m any industries the re a re som e eternal truths tha t a reconsta ntly cultiva ted . Peo ple tend to say that this is the

way it is .

Many time s it is not tha t w ay. No one has bothe red tocheck the real truth. It is surprising how often there is no

evidence o f trend s tha t p eo ple c laim they a re sure of. So

look for evide nce !

10.3 Analyzing

10.3.1 Inab ility to identify the m ost releva nt uncerta int ies

Unc ertainties on too low a system ic leve l do not have ab ig eno ugh impac t on the system to c rea te scena rios tha t

are d ifferent from ea c h other in mo re than one or two

aspects.

An unc ertain trend that has a g rea t imp ac t on ma ny othertrend s will lea d to mo re d ifferent c onseq uenc es for the

system being stud ied .


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It is of sim ilar importanc e to find the uncerta inties tha t a remo st imp ortant for the foc a l question.

10.3.2 Sc enarios based on unc erta inties tha t a re not rea llyuncertain

It c an be tem pting to use a scenario a xis tha t is not reallyunc ertain but g ives very interesting sc ena rios in

com bina tion w ith another axis. This ea sily hap pens when

the re is not enoug h time for scenario b uilding o r when the

issue is ve ry difficult.

Sometimes a p roduc tive scena rio c ross is foundimm ed ia tely, but mo st often it ta kes a t lea st a day or two

to find the right c ombina tion o f uncertainties.

10.3.3 Sc enarios tha t are de ta iled b ut no t co mprehe nsive

Creative writers can easily prod uce a long desc rip tion tha tfasc ina tes the rea der. These m ay only mirror a very narrow

perspective however.

A c om parison tab le based on trends or id entifiedimportant fa c to rs used as a chec k list for the na rra tive

desc rip tion w ill enhanc e the com prehe nsiveness of the

scenarios.

10.3.4 Sc enarios tha t are too g ene ral

The scena rios ma y be desc ribed on too ge neral a leveltha t is not relevant fo r the question . It is ea sy to bec om e

fasc ina ted with d esc rip tions of the w orld a t a high systemic

level.

What is releva nt fo r the o rganiza tion is most o ften found incom prehensib le p a tte rns d iscerned in its field , and ana lysis

of their c onseq uences for the a c tual development of the

organization.

Ta iloring these pa tte rns to fit the purpose ma kes themuseful.


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10.4 Imaging

10.4.1Pie in the sky The vision may see m so remote tha t it is c onc eived of as a

free -float ing fanta sy that the organiza tion c an never

rea lize. Sometimes the vision bears litt le rela tion to the

probable future environment.

This is one of the reasons why a sc ena rio p roc essconstitutes a goo d sta rt fo r a vision p rojec t.

10.4.2 Lack of p artic ip ation in the v ision p roc ess

Visions built solely by a few me mbers of the topma nag eme nt tend to stay o n the bo okshelves.

If peo ple from the orga nization have be en a pa rt of thevision p roc ess, it c an be ma de c onc rete muc h more

easily.

The vision will a lso fa r better reflec t people s tho ughts.10.4.3 Not co mm unic a ting the vision enough

Ma ny peo p le seem to think tha t a vision w ill insp ire a ndguide onc e it is p rinted in a fancy folde r. Under-

com munica tion is the most freq uent rea son w hy visionary

leadership fails.

Com municate over and o ver ag ain and relate strate giesand ac tions to the vision wheneve r they a re d isc ussed .

10.4.4 Not living the vision

Strate g ies, goals and ac tions of ten see m to be set w ithoutany relation to the vision, and nothing is d one to remove

ob sta c les to a new vision .

Ob viously the to p ma nagement ha s to b e ve ry consisten tin living the vision. Then it w ill rub off on the rest o f the

organization.


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10.5 Deciding

10.5.1 Sta nd ard a nswers to no n-sta ndard e nvironments

Peo ple o ften fa il to rea lize tha t it ta kes both time and asystematic p roc ess to find strate g ies tha t a re not a lrea dy in

com mon use.

Few people realize that the result of a scenario planningprocess can provide lot of ideas for new strategies and

solutions.

10.5.2 It fee ls sa fe to c ling o n to old strateg ies

It is very easy to c ling on to old strate g ies tha t ha ve servedwell in the past.

It seems that organizations will not accept they must findnew paths until it has been proven time after time that

their old stra teg ies do no t wo rk in the fa ce o f change .

10.5.3 Not t ranslat ing long-term strateg ies into short-term

developments

A strate gy will not p rod uce results until rea l change s ha vebee n made in a rea s such a s work proc esses. It ta kes a lot

of ene rgy to change a we ll-estab lished work pa tte rn into a

new one.

This em pha sizes the nee d to involve m idd le-ma nagem entin strate gy de velop ment and follow-up.

10.5.4 Imp lementing w ork pa tterns tha t mee t future c hange s too

soon

A partic ula r stra teg y or solution m ay be very go od a tme eting a future c hange . But the future is not he re ye t.

Market ana lyses do no t g ive g oo d answe rs abo ut howtom orrow s consumer will rea c t, but they ca n g ive a very

goo d answe r about how tod ays consumers will respond

to a new product.


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10.6 Acting

10.6.1 Business inte lligenc e only focuses on comp etitors a c tions

The business inte lligenc e func tion may be too na rrow lyfoc used and only conside r chang es ma de by c om pe titors

and customers.

A wide r scanning and a dee pe r analysis c an g ive e arlierwa rnings on cha nges that c an a ffect the co mp any.

10.6.2 Low end uranc e

The peop le involved in sc anning the environm ent o ften d oit a s a part-time job .

The risk is obvious tha t the y will g ive p riority to other ta skstha t a re m ore highly valued in the organiza tion.

It is ob vious tha t sc anning must be a c corded a g rea tervalue.

10.6.3 The info rmation is only used by a few

There a re m any organiza tions tha t ha ve d a ta bases filledwith informa tion.

The prob lem is tha t ve ry few peo ple know tha t it exists, andeven fewe r have the knowledg e nee ded to use it.

10.6.4 The future is fo rgo tten

During a scena rio p roc ess, a strong foc us is put on thefuture a nd the c hallenges tha t it p rovides.

When the p roc ess is ove r peo ple go b ack to the eve ryda yquestions tha t tend to be plac ed on to p of the in-tray. The

danger is tha t the future issues w ill no t get to the top of the

p ile until too late.

11. KEY PERFORMANCE INDICATORS

While scenario p lanning has no spec ifica lly de fined me tric s, a sc enario

p lanning e ffort c an be c onsidered suc c essful if the p roc ess is used to help theorga nization d evelop a c onsensus-ba sed b luep rint for the ir future. Taking into


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acc ount c urrent resources, the o rganiza tion should now develop deta iled

p lans in response to the orig ina l business issue. Onc e deve loped, the

scena rios serve the further role of vigorously testing these op tions. Theorganization can test its proposed options against the environmental

c ond itions set out w ithin ea ch sc enario, c onsidering the ir viab ility,

effec tiveness and othe r issues.

It is worth c onsidering tha t the scenario p roc ess is not o ne of linear

imp lementa tion --- comp leted onc e a nd then la id a side . As a strateg ic

planning tool, the effectiveness of scenarios lies in processes of continuous

environmental analysis, scenario generation, option development, scenario

testing , selec tion, refinem ent and imp lementa tion. The imp lementa tion

proc ess is accom panied b y furthe r environmental analysis in orde r to up date

the imp ac ts of o rganiza tiona l ac tions.

12. REFERENCES

a ) Enha nc ing Strategy Eva luat ion in Scena rio Planning: A Role forDec ision Ana lysis, Good win, P. & Wright, G ., Journal of Ma na ge me nt

Stud ies Volume 38 No. 1, 2001.

b ) Scena rio Planning as a Strateg y Technique, Verity J., EuropeanBusiness Journa l Volume 15 No. 4, 2003.

c ) Scena rio Planning Rec onsidered , Harvard Managem ent Update,Harva rd Business Scho ol Pub lishing , 2006.

d ) Scenario Planning, Mc Kiernan, P., Inte rna tional Enc yclopae d ia ofOrga niza tion Stud ies, Thousand Oa ks, Ca lifo rnia : USA, 2008.

e) Multip le Scena rio Development: Its Conc ep tual a nd Beha vioralFoundation , Sc hoem aker, P., Strate g ic Ma nagem ent Journal Volume

14 No. 3, 2993.

f) Scena rio Planning : A Tool for Stra teg ic Thinking, Scho emaker, P., Sloa nMa nagem ent Rev iew Volume 36 No.2, 1995.


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g) Plot ting your Scena rios: An Introd uc tion to the Art a nd Proc ess ofScena rio Planning , Sc hw artz, P. & Og ilvy, J., Global Business Netw ork,

2004.

h) Foresight Futures Scena rios --- Deve lop ing and App lying aPartic ipa tive Strateg ic Plann ing Tool, Berkhout , F. & Hertin, J., Greene r

Managem ent Journal, 2002.

i) Scena rio Planning , Ring land , G., John Wiley & Sons Ltd ., New York:USA, 2006.

j) The Sixth Sense: Accelerat ing Organiza tiona l Learning with Scena rios,va n d er Heijden, K, Brad field , R., Ca irns, G. & Wright, G ., John Wiley &

Sons, Ltd . New York: USA, 2002.

k) Peo ple and Connec tions Glob al Scena rios to 2020, Shell s Glob a lScena rios www.shell.com

l) Alte rnative Futures: Scena rios fo r Business in Austra lia to the Year 2015,Austra lian Business Foundation, A report from Global Business Nerwork,

September 1999.

m)Learning from the Future: Competitive Foresight Scena rios, Fahey, L. &Rand a ll, R.M., John Wiley & Sons Ltd . New York: USA, 1998.

n) Scena rios: The Ge ntle Art of Reperce iving , Wack, P., Harva rd BusinessSchool Working Paper, 1984.

o) How Scenarios Trigger Stra te g ic Thinking , Millet, S.M., Journa l of LongRang e Planning, 1988.

p ) Scena rio Planning: The Link Between Future and Strateg y, Lind gren,M. & Band hold, H., Pa lgrave Ma cmillan USA, 2003.

q ) Crea ting Futures: Scenario Planning as a Strate g ic Ma nagem ent Too l,2nd edition, Godet, M., Economica Bookings London: UK, 2006.

r) The Current Sta te of Scenario Development Foresight Volume 9 No. 1,Bisho p, P., Hines, A. & C ollins, T., Ma rch 2007.

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