Scenario planning is useful at a few points in the strategic planning process.
The key idea is to accept that we cannot predict the future. What then, is a planner to do? Scenario writing can help us.
Review and list current trends, and expected events. Try to envisage the composite future that would arise from the unfolding of such trends and events unfolding.
Scenario work is a method to aid in visualizing how various futures might emerge. Each of these possible futures is a “scenario.”
For example - trying to forecast which approach to business taxation will come from a government review is probably futile. Instead, the planning team will try to describe what might happen with each of the possible options.
Scenarios are not quite predictions or forecasts. Instead, they are more like the plot of a play. Such planning is like plotting how current trends may develop. It is as if a playwright imagines the characters in a play interacting with each other and influencing each other and so moving the action of the story forward.
"All the world's a stage" is a phrase that begins a monologue from William Shakespeare's As you like it. The speech compares the world to a stage and life to a play, and catalogues the seven stages of a man's life, sometimes referred to as the seven ages of man.
Of course, the writer could imagine more than one outcome of the plot, and a different scenario would be involved.
Study of factors that influence performance helps in writing scenarios. This includes anticipating how current strategies will play out. More importantly, and more difficult to pick will be environmental trends. Changes in the social and political contexts affect the firm and the industries within which it operates. Other changes include technological innovations, demographic trends, changes consumer tastes as well as the comings and goings of competing enterprises.
Some people, like David Beurle of future->iQ partners have taken this idea to the point of developing actual game like tools for scenario planning. This set of interactive games is a great illustration of the value of using scenarios in planning.
To encourage you to see the value of scenario planning let me refer to the work of noted science fiction writer Arthur C. Clarke. Clarke, the only science-fiction writer to be nominated for the Nobel Peace Prize, set forth his views in his three laws of prediction.
Clarke's Three Laws are:
In strategic planning, it pays to be willing to use your imagination!
Scenario work addresses challenges such as the following -
These questions lift the ability of managers to be more flexible in the face of unfolding events. Planning with scenarios is like a dress rehearsal for the future. Even though things rarely unfold as envisaged, managers enhance their strategic thinking; they also take less time to face up to the realities they have to deal with.
Some resources to help in the use of scenarios for your organization -
A leading source is the work of Peter Schwartz. He has been a pioneer in the evolution and application of scenarios in planning.
HisThe Art of the Long View is the
classic book on working with scenarios.
Some other useful resources include the following items.
The Fifth Discipline: The Art and Practice of the Learning Organization, by Peter Senge is a great resource, including for nonprofits: the work on systems thinking is very useful for scenario planning.
Scenario planning discussions need not be the usual tedious planning discussions. They can be engaging and even fun! Dare I say magical!
Steve Jobs not only devised a strategy to revive the struggling Apple Company. He was able to present Apple products as part of a better future for the world. His product launch presentations were like a magic show!
Find out how to improve your business presentations. Add a little magic to them. Especially when considering the future of your organization, check out this book.
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