Scenario Planning

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Learning about the future in which a corporate strategy is formed. Explanation of Scenario Planning.

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print

Scenario Planning

What is Scenario Planning? Description

Scenario Planning is a model that can be used to explore and learn the future in which a corporate strategy is formed. It works by describing a small number of scenarios, by creating stories how the future may unfold, and how this may affect an issue that confronts the corporation.


Royal Dutch Shell, one of the first adopters, defines scenarios as follows: Scenarios are carefully crafted stories about the future embodying a wide variety of ideas and integrating them in a way that is communicable and useful. Scenarios help us to link uncertainties about the future to the decisions that we must make today.
 

The scenario planning method works by understanding the nature and impact of the most uncertain and important driving forces affecting the future. It is a group process which encourages knowledge exchange and development of mutual deeper understanding of central issues that are important to the future of your business. The goal is to create and craft a number of diverging stories by extrapolating uncertain and heavily influencing driving forces. The stories, plus the processes to create them, have a dual aim: to increase the knowledge of the business environment and to widen both the receiver's and participant's perception of possible future events. The method is most widely used as a strategic management tool, but it is also used for enabling group discussion about a common future.


Steps in Scenario Planning. Process

  1. Identify people who will contribute a wide range of perspectives.

  2. Comprehensive interviews/workshop about how participants see big shifts coming in society, economics, politics, technology, etc.

  3. Group (cluster) these views into connected patterns.

  4. Group draws a list of priorities (the best ideas).

  5. Create rough pictures of the future, based on these priorities. Stories and rough scenarios.

  6. Add further detail to get impact scenarios. Determine in what way each scenario will affect the corporation.

  7. Identify early warning signals. Things that are indicative for a particular scenario to unfold.

  8. The scenarios are monitored, evaluated and reviewed.

Some traps to avoid in Scenario Planning

  1. Treating scenarios as forecasts.
  2. Constructing scenarios based on too simplistic a difference. Such as optimistic and pessimistic.
  3. Failing to make the scenario global enough in scope.
  4. Failing to focus the scenarios in areas of potential impact on the enterprise.
  5. Treating scenarios as an informational or instructional tool rather than for participative learning and/or strategy formation.
  6. Not having an adequate process for engaging management teams in the scenario planning process.
  7. Failing to put enough imaginative stimulus into the scenario design.
  8. Not using an experienced facilitator.

Scenario Planning Forum
  Exploring Possible Strategic Directions
It is a very good approach for identify two or mor...
     
 
  Scenario Building Elements
Who can help me out with a basic structure for bui...
     
 
  Why Scenario Planning is Important
Most companies have their methods for planning - S...
     
 
  Scenario Planning Instruments
For the thesis of my MBA study I'm researching the...
     
 
  Uses of Scenario Planning
What exactly can we use scenario planning for? I m...
     
 
  Decision makers disagree
One is always dealing with perceptions. One techni...
     
 
  What is a Scenario? Definition
A scenario is a description of a plausible future ...
     
 
  Time Frame in Scenario Planning?
A scenario consist of a statement of an end state ...
     
 
  Embracing Complexity
Scenario Planning is a strategic tool which can be...
     
 

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Best Practices - Scenario Planning Premium

Expert Tips - Scenario Planning Premium
 

Defining Feasable / Probable Scenarios

To investigate potential driving forces, you can p...
Usage (application): Finding Driving Forces for Scenario Planning
 
 
 

Change How Decision-makers See the World

A valuable insight by Pierre Wack on his pioneerin...
Usage (application): The Impact upon Mental Models of Decision-makers
 
 
 

Describing and Analyzing Driving Forces

Scenarios are caused by trends or driving forces. ...
Usage (application): Scenario Planning
 
 
 

Four Bad Practices in Scenario Planning

Harris (2014) mentions 4 common bad practices that...
Usage (application): Scenario Planning, Scenaro Thinking, Scenario Analysis
 
 
 

What to do after the Scenarios have been Described?

According to Jeremy Kourdi, once you selected a re...
Usage (application): The Next Steps to Take...
 
 
 

Transformation Scenario Planning

Transformational Scenario Planning is not about ad...
Usage (application): Scenario Planning, Strategic Team Collaboration
 
 
 

Why Society is More Risky than Before

In his 1992 book "  
 
 

How to Build Strategic Agility?

In order to get strategic flexibility you c...
Usage (application): 4 Phase Framework of Johnson & Johnson
 
 
 

Learning via the Case Method

The case method in business education has o...
Usage (application): Decision-making, Problem-solving
 
 
 

The Advantages of Group Decision-Making

The benefits of group decision-making inclu...
Usage (application): Group Decision-Making
 
 
 

Taking Risk Management from Control and Compliance into a Competitive Advantage

Since events tend to be repetitive over time, many...
Usage (application): Strategic Risk Management
 
 
 

Align Strategy and Risk Management

In a recent white paper titled "Foundations of GRC...
Usage (application): Performance-Aligned Risk Management
 
 
 

How to Link Risk Management and Strategy?

Firms practicing strategic risk management:
1...
Usage (application): Strategic Risk Management, Best Practices
 
 
 

3 Causes of Disagreement in Team Decision-making Processes

According to Freeman and Haskins (2014), there are...
Usage (application): Group Decision-making, Team Decision-making, Reasons for Disagreement, 3 Fs, Group Collaboration
 
 
 

History of Scenario Planning

- The scenario planning approach was first introdu...
Usage (application): Decision-making
 
 
 

From Scenario Planning to Scenario Thinking and Scenario Learning

Recently you can also encounter the terms scenario...
Usage (application): Scenario Planning
 
 
 

How to Use Counterintuition to Fight 5 Frequent Decision Making Errors

Mauboussin describes five mistakes in decision mak...
Usage (application): Strategic Decision Making, Dealing with Complexity, Dealing with Uncertainty, Strategy
 
 
 

Narrative-based Scenario Planning

Traditional scenario-planning generally provides a...
Usage (application): Scenario Planning, Strategic Agility, Anti-Fragility
 
 
 

Meta-cognition (Meta-thinking) in Scenario Thinking

Most businesses are primarily concerned with the t...
Usage (application): Schools of Thought, Strategic Thinking, Scenario Thinking, Strategic Assumptions, Strategic Reasoning
 
 
 

The Disadvantages of Group Decision-Making

The drawbacks of group decision-making incl...
Usage (application): Group Decision-Making
 
 
 

Having more than 1 Team in Scenario Planning

HBR March 2007 has an interesting short article on...
Usage (application): Scenario Planning
 
 

Resources - Scenario Planning Premium

Comprehensive Introduction to Scenario Planning

Presentation with comprehensive speaking notes abo...
Usage (application): Scenario-planning, Storytelling
 

How to Improve Strategic Decision Making?

In this video Michael Mauboussin, Credit Suisse's ...
Usage (application): Strategic Decision Making, Cognitive Bias, M&A, Corporate Finance
 

Scenario Planning and Risk Management in Uncertain Business Enviroment

Extensive and detailed presentation. about scenari...
Usage (application): Scenario Planning, Risk Management, Strategic Uncertainty
 

An Explorer's Guide to SP

Guidance and ideas by Shell for those inter...
Usage (application): Scenario Planning
 

Scenario Planning Diagram

Download and edit this 12manage PowerPoint graphic...
Usage (application): Exploring, Challenging Future Options
 
 

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Related to Scenario Planning: Chaos Theory  |  Delphi Method  |  System Dynamics  |  PEST Analysis  |  Stakeholder Analysis  |  Stakeholder Mapping  |  Strategic Risk Management  |  Force Field Analysis  |  Real Options  |  Mind Mapping  |  Brainstorming  |  Analogical Strategic Reasoning  |  Plausibility Theory  |  Game Theory  |  Root Cause Analysis  |  Dialectical Inquiry  |  OODA Loop  |  Contingency Theory  |  Six Thinking Hats


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