Useful Resources
Lingren, Mats & Bandhold, Hans, 2003, Scenario Planning - the link between future and strategy, Palgrave Macmillan.
Scenario Planning
Scenario Planning is a tool for understanding the possible futures facing the company and evaluating how current decisions might be played out in those possible futures. Scenario Planning is an effective strategic thinking tool where there is a significant amount of uncertainty in the decision context.
There are some similarities between options analysis and scenario planning. However, options analysis tends to focus on the detailed evaluation of a number of well-defined alternatives, whereas scenario planning focuses more on creating a story which describes possible futures. A scenario is not a forecast or projection…it is an answer to the question “What can conceivably happen?”
Scenario Planning is a useful tool for dealing with the uncertainties which come into play in long-term decision making. Forecasting tries to “predict” the future…and that is useful…but it is also important to think about the possible upside and downsides around that forecast, and prepare to deal with not one but many possible futures.
Scenarios can also be used to “filter” ideas and challenge paradigms. They raise awareness of the “triggers” for change…making people more alert to these changes in the real environment.
Some useful Scenario Planning Resources have been provided in the sidebar. Shell have been pioneers in the area of scenario planning and there is valuable information on their company website.