scenario planning
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Scenario Planning
Nancy PridalPam NienaberDan Schaecher
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What is Scenario Planning?
Scenarios are stories about the way the world might turn out tomorrow
A planning tool for ordering one’s perceptions about alternative future environments to guide decision making
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What Scenario Planning is not…
Scenarios are not predictions or forecasts Scenarios are vehicles for helping people learn Scenarios allow a manager to say, “I am prepared for whatever happens.”
Scenario planning is an art - not a science. The end result is not an accurate picture of
tomorrow, but better decisions about the future
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Historically
Roots in military exercises
Corporate World – 1970’s Oil Crisis Royal Dutch/Shell Background:
Emergence of OPEC as a major global force and influencer
Depleting US oil reserves.
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Historically - Royal Dutch/Shell
Pierre Wack used scenario planning to help evaluate events that may affect the price of oil
He helped managers imagine the decisions they might have to make
Of the major oil companies, only Shell was prepared emotionally for the change. The company’s executives responded quickly.
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Steps in Scenario Planning
Preparation Identify people who will contribute a
wide range of perspectives
Isolate the decision to make Evaluate
Key drivers for the company’s success? “Pre-determined elements or factors we can
count on” Critical events that may influence success?
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Steps in Scenario Planning
Identify Driving Forces Consider providing a comprehensive
interviews/workshop about how participants see big shifts coming
Society Technology Economics Politics Environment
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Steps in Scenario Planning
Next - Look at possible changes in these key drivers More of the same, but better Worse
Decay and depression Different but better
Fundamental change
Cluster or group these views into connected patterns In a group draw a list of priorities (the best ideas)
Sketch out rough pictures of the future based on these priorities (stories, rough scenarios)
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Steps in Scenario Planning
Dialogue around the implications Determine in what way each scenario will affect the
corporation Identify early warning signals - things that are
indicative for a particular scenario to unfold
Monitor, evaluate, adjust
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Steps in Scenario Planning
Typically you find yourself moving through the scenario process several times Refining a decision Performing more research, Seeking out more key elements Trying on new plots More dialogue
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Scenario Planning – More Info
Suspend your disbeliefs What might happen that you might
otherwise dismiss
Research Pursue and gathering information Educate yourself so that you will be able
to pose more significant questions.
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Traps to Avoid
Treating scenarios as forecasts Remember - scenarios are not about predicting the
future, rather perceiving futures in the present
Constructing scenarios based on too simplistic difference Such as optimistic & pessimistic
Failing to make the scenario global enough in scope
Failing to focus scenarios in areas of potential impact on the business
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Traps (continued)
Treating scenarios as an information or instructional tool Credibility increases when it is participative
learning and strategy formation
Not having an adequate process for engaging executive teams
Failing to put enough imaginative stimulus into the scenario design
Not using an experienced facilitator
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Sources
The Art of the Long View: Planning for the Future in an Uncertain World” by Peter Schwartz 1991
“Scenarios. The Art of Strategic Conversation” by Kees Van Der Heijden 1996
Website: Valuebasedmanagement.net
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Sources
The Mind of a Fox, Scenario Planning in Action by Chantell Illbury & Clem Sunter. Website: http://www.mindofafox.com/introduction.php
Presence, Exploring Profound Change in People, Organizations and Society by Senge, Scharmer, Jaworski, & Flowers
Orbiting the Giant Hairball – A Corporate Fool’s Guide to Surviving with Grace by Gordon MacKenzie