Scenario Planning

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Summary
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.

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What is a Scenario? Definition
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Why Scenario Planning is Important
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Uses of Scenario Planning
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Embracing Complexity
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Decision makers disagree
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Advanced insights about Scenario Planning. Here you will find professional advices by experts.


Defining Feasable / Probable Scenarios

Finding Driving Forces for Scenario Planning
To investigate potential driving forces, you can perform a PEST analysis (Political, Economic, Society, Technology) or S (...)

Change How Decision-makers See the World

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Four Bad Practices in Scenario Planning

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Harris (2014) mentions 4 common bad practices that should be avoided when conducting scenario analysis. These are the fo (...)

Describing and Analyzing Driving Forces

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What to do after the Scenarios have been Described?

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According to Jeremy Kourdi, once you selected a relevant future scenario that you can work through to evaluate your orga (...)

Transformation Scenario Planning

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How to Build Strategic Agility?

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The Advantages of Group Decision-Making

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Ten Commandments for Strategic Forecasters

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History of Scenario Planning

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- The scenario planning approach was first introduced after World War II, as a tool for military planning. The U.S. Air (...)

From Scenario Planning to Scenario Thinking and Scenario Learning

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How to Use Counterintuition to Fight 5 Frequent Decision Making Errors

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Narrative-based Scenario Planning

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Meta-cognition (Meta-thinking) in Scenario Thinking

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The Disadvantages of Group Decision-Making

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Having more than 1 Team in Scenario Planning

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Information Sources

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Various sources of information regarding Scenario Planning. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Comprehensive Introduction to Scenario Planning

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Scenario Planning and Risk Management in Uncertain Business Enviroment

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Extensive and detailed presentation. about scenarios, risk and uncertainty. Topics: - Integrated Risk Management Framew (...)

An Explorer's Guide to SP

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Guidance and ideas by Shell for those interested in scenario thinking. Contains two parallel streams: one explains the i (...)

Scenario Planning Diagram

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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