What Is Scenario Planning?

What is Scenario Planning?

Scenario planning is a method for learning about the future by understanding the nature and impact of the most uncertain and important driving forces affecting our 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 this and similar methods have been used for enabling other types of group discussion about a common future.

Scenario planning is a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and generalization of classic methods used by military intelligence.

The basic method is that a group of analysts generate simulation games for policy makers. The games combine known facts about the future, such as demographics, geography, military, political and industrial information, and mineral reserves, with particular possible social, technical and political trends.

Scenario planning can include elements that are difficult to formalize, such as subjective interpretations of facts, shifts in values, new regulations or inventions.

These combinations of fact and possible social changes are called "scenarios." The scenarios usually include plausible, but unexpectedly important situations and problems that exist in some small form in the present day.

Any particular scenario is unlikely. However, good analysts select the features of scenarios so that the features are both possible and uncomfortable. Scenario planning can therefore help policy-makers anticipate hidden weaknesses and inflexibilities in organizations and methods. When found years in advance, the weaknesses can be repaired or reduced more easily and more correctly than if a similar real-life problem should present as an emergency. For example, a company may discover that it needs to change contractual terms to protect against a new class of risks, or collect