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Scenario planning is a model for
learning about the future in which a corporate strategy is formed
by drawing a small number of scenarios, stories how the future may unfold,
and how this may affect an issue that confronts the corporation.
Royal Dutch Shell, one of the first and
leading 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 link the uncertainties we hold about the future to the
decisions 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 important to the future of your business.
The goal is to craft a number of diverging stories by extrapolating
uncertain and heavily influencing driving forces. The stories together
with the work getting there has the dual purpose of increasing the
knowledge of the business environment and 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.
Typically, the scenario planning
process is as follows:
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identify people who will contribute
a wide range of perspectives
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comprehensive
interviews/workshop about how participants see big shifts
coming in society, economics, politics, technology, etc.
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cluster or group these views into connected patterns
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group draws a list
of priorities (the best ideas)
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sketch out rough
pictures of the future based on these priorities (stories, rough scenarios)
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further work out
to detailed impact scenarios (determine in what way each scenario will affect the
corporation)
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identify early
warning signals (things that are indicative for a particular scenario to
unfold)
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monitor, evaluate
and review scenarios
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 scenario global enough in scope
4) failing to focus scenarios in areas of potential impact on the
business
5) treating scenarios as an informational or instructional tool rather
than for participative learning / strategy formation
6) not having an adequate process for engaging executive teams in the
scenario planning process
7) failing to put enough imaginative stimulus into the scenario design
8) not using an experienced facilitator
Related to Scenario Planning:
System Dynamics
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PEST analysis |
Force Field Analysis |
Real Options |
Brainstorming |
Plausibility Theory |
Game Theory |
Root Cause Analysis |
Dialectical Inquiry
| OODA Loop |
Contingency Theory |
Six Thinking Hats
More management models
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