Scenario planning helps organisations plan for success over the long term.

The particular strength of scenario planning as a strategic planning tool is the way it can help people in an organisation to plan within situations of high complexity and high uncertainty.

Scenario planning involves blending together what is known, with that which has been imagined - to fill the gaps of what is unknown. The output is scenarios or views of the future.

A good scenario is internally consistent and good scenario planning requires the organisation to create scenarios that span a very wide range of possibilities.

Scenario planning is powerful. It is often viewed purely as a strategic planning tool. However, it can be used effectively to assist with challenges ranging from making small tactical decisions through to shaping major strategic planning visioning exercises.

Scenario planning can be differentiated from other strategic planning tools by the way it enables an organisation to consider the effect of multiple factors in combination with each other.

Indeed, during the scenario planning process, managers can discover how, when they consider certain factors in isolation from each other, those factors may not be deemed to be key drivers of change in the organisation’s environment. However, when the managers consider these factors in combination with each other , they can learn that the factors could magnify the impact of each other or even increase the likelihood of the other factor happening.

Examples

• A stronger domestic currency can weaken exports causing an increased trade deficit. This may trigger an economic recession, which in turn creates unemployment and reduces domestic production.
• A ban on smoking in public places makes it inconvenient for smokers to smoke, this means that cigarette sales fall. The ban also means non-smokers encounter smoke less frequently and their attitude towards smoking hardens. This in turn puts more pressure on smokers to quit.

“We can either stumble into the future and hope it turns out alright or we can try and shape it. To The first step is to work out what it might look like.”

Stephen Ladyman – UK Minister for Transport.

Scenario Planning: Business Benefits

Scenario planning has been used most notably by Shell to improve the quality of its oil forecasting. However, scenario planning should not be seen as a way to predict the future – the future cannot be predicted!

Indeed, any board of executives which is confident that it has correctly predicted the future has probably just extrapolated current trends. Extrapolation is not scenario planning.

The true power of scenario planning lies in how it enables teams to think the unthinkable – so that they can prepare for it. Scenario planning helps teams to identify risks and opportunities.

A further benefit of scenario planning is the way in which scenario planning affects the mindset and behaviours of the team who took part in the scenario planning.

People learn a lot during a good scenario planning process, about their organisation and the environment in which it operates. In particular scenario planning helps teams of people to carry multiple alternative futures in their minds. This means that going forward they can be more alert; looking for clues in their environment as to which way things may go.

By contrast, if corporate strategy for the organisation is focused around only one type of future, there is a risk that the team will believe that this is the future and take it as ‘certain’. They could be less alert to changes in their environment. 

The Scenario Planning Process

The core activities involved in scenario planning are as follows.

• Separate what information about the organisation’s environment can be forecasted from that which is unknown.
• Determine the drivers for change.
• Bring the drivers together into a scenario planning framework.
• Create scenarios.
• Fine tune the scenarios – combining some together if appropriate.
• Further develop each scenario. Check it is robust.
• Record the scenario as a narrative, illustrate it – bring it to life in creative ways.
• Identify the issues arising from the scenarios and use these to inform the strategic plan.
• Keep scenarios in mind and evolve them over time.

Why Choose Anatellô To Help You With Scenario Planning?

Three key drivers of successful scenario planning are:-

• Effective group process
• Enabling creative thinking
• Good strategy development process

Helping clients in these areas is at the heart of what we do at Anatellô. 

Facilitating groups to think creatively is a core competence of Anatellô facilitators.

Indeed, using an experienced facilitator for your scenario planning process will ensure that you generate ‘great scenarios. Great scenarios incorporate the key drivers for change in your environment, cover a broad range of possibilities and are internally consistent.

Groups of people working on scenario planning need to explore ideas together. They need to be able to express themselves freely and engage with one another. This may at times lead to them contradicting each other, negotiating and changing their minds. This is all part of the process of getting to consensus over the range of scenarios.

A skilled facilitator ensures that the experience of scenario planning remains constructive at all times and that you achieve your desired outcome.