Scenario Planning

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Scenario Planning

• Planning for the Future in an Uncertain World
• Scenarios as Building Blocks of Organizational
  Performance

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Scenario Thinking

• A discipline for encouraging creative and
  entrepreneurial thinking and action in contexts
  of change, complexity, and uncertainty.
• Pierre Wack, originator of scenario thinking

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Thinking About the Future

• Futurism is an art of re-perception. It means
  recognizing that life will change, must change,
  and has changed, and it suggests how and why. It
  shows that old perceptions have lost their
  validity, while new ones are possible.
• Bruce Sterling, science fiction writer

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Scenario Thinking/Planning

• A powerful process for organizations to plan for
  the future in an uncertain world
• Assumes that the future is unpred-ictable, that
  change will happen, and that organizations
  benefit by thinking about alternative futures and
  the strategic options to navigate through and
  take advantage of potential scenarios

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Scenarios

• Are stories about how the future might unfold for
  our organizations, issues, nations, and the
  world.
• Are not predictions, rather, they are provocative
  and plausible stores about the diverse ways in
  which relevant issues outside our organizations
  might evolve.

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Scenarios

• Are hypotheses, not predictions, created and used
  in sets of multiple stories, usually three or
  four, that capture a range of possibilities, good
  and bad, expected and surprising.
• Are designed to stretch our thinking about the
  opportunities and threats the future might hold,
  and to weigh those opportunities and threats when
  making both short- and long-term strategic
  decisions.
• Global Business Network

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Thinking About the Future

• forces will affect the world, in ways that
  most decision makers do not automatically
  expect.what scenario planners call predetermined
  elements forces that we can anticipate with
  certainty because they have already begun to take
  place. They are going to surprise us because,
  while the basic events are virtually
  predetermined, the timing, results, and
  consequences are not..but we can anticipate the
  range of possible results. Peter
  Schwartz, futurist

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Scenario Thinking

• Both a process and a posture it is the process
  which scenarios are developed and then used to
  inform strategy. After that process itself is
  internalized, scenario thinking becomes a posture
  toward the world a way of thinking about and
  managing change, exploring the future to greet it
  better prepared.

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Scenario Thinking

• Begins by identifying forces of change in the
  world that may have impact on the people served
  by the organization as well as the strategic
  direction of the organization itself.
• These forces are combined in different ways to
  create a set of diverse stories about how the
  future could unfold.
• Global Business Network

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Guidelines

• Long View day-to-day work is usually driven by
  near-term concerns and urgent needs scenario
  thinking requir4es looking beyond immediate
  demands and peering far enough into the future to
  see new possibilities asking what if

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Guidelines

• Outside-In Thinking most think from the inside,
  the things they control, out to the world they
  would like to shape. Conversely, thinkiing from
  the outside-in begins with pondering external
  changes that might, over time, profoundly affect
  your work.

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Guidelines

• Multiple Perspectives the introduction of
  multiple perspectives -- different from managing
  multiple stakeholders is based on diverse
  voices that shed new light on strategic
  challenges, helps to better understand ones own
  assumptions, and exposes new ideas that inform
  perspective and help to see the big picture of an
  issue or idea. Global Business Network

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Scenario Building

• Scenarios are tools to help us take a long view
  in an environment of uncertainty.
• They are stories about the way(s) the world might
  turn out in the future.
• ..that help us adapt to changing aspects of
  our environment
• ..about different pathways to tomorrow
• Scenarios are memories of the future.

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Scenario Process

• Determine the key question
• Identify major factors in the environment
• Identify driving forces
• Rank by importance uncertainty
• Develop scenarios
• Determine implications
• Identify leading indicators

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Key Question(Illustrative focal issue or key
decision)

• What are the implications of potential,
  alternative futures for
• (a) The children and families of the region we
  serve
• (b) The future vision, challenges,
  opportunities, strategies, priorities, and
  organizational vitality of name of
  organization

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Identify Major Factors in the Environment

• Scientific innovation technology
• Signs that public perception is changing
• What you see at the fringe of things
• Listen to the music
• The thinking of people you respect
• What surprises you

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Identify Driving Forces and Uncertainties

• Potential categories to think about
• Society
• Economics
• Politics
• Environment
• Predetermined elements
• Uncertainties

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Rank By Importance Uncertainty

• Two criteria the degree of
• Importance for the issue
• Uncertainty surrounding those factors
  and trends
• The point is to identify the two or three factors
  or trends that are most important and most
  uncertain

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Develop Scenario Logics

• Once the fundamental axes of crucial
  uncertainties have been identified it is useful
  to present them as a spectrum (along one axes),
  or as a matrix (with two axes), or as a volume
  (with three axes)

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Flesh Out the Scenarios

• Write stories create a narrative
• Each key factor or trend should be given some
  attention

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Determine Implications

• Return to the key question what are the
  implications of each scenario?
• What does this mean for strategy?
• What are the opportunities, options, risks?
• What are the choices?

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Implications for LeadershipWith Multiple
Scenarios

• Common strategy
• Hedge strategy
• Bet on one strategy

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Identify Leading Indicators

• What should we look and listen for that will tell
  us a scenario is emerging/developing?
• What should we look and listen for that will tell
  us a scenario is changing?