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​Using Scenarios

In a planning context, the term “scenario” is used to describe a story of a possible future that the organisation might encounter.

Scenarios are very useful devices for organising a large amount of seemingly unrelated economic, technological, competitive, political, and societal information in a logical manner and stimulating discussion about the choices that lie ahead.

Scenarios have two main purposes:

  • anticipating and understanding risk, and
  • discovering new strategic options.

Scenarios

  • acknowledges that the future is unpredictable; the scenarios are distinct, plausible pictures of the world in which we might one day live and work;
  • are a valuable tool for evaluating alternative decisions—a good decision or strategy to adopt is one that would work well in any one of a number of possible futures;
  • is a valuable tool for evaluating alternative decisions (it should not be used to find good decision alternatives).
  • can help identify what actions or situations should be avoided;
  • in situations of uncertainty, becomes a learning process which never stops by facilitating learning through increasing awareness of long-term interactions between the driving forces;
  • by providing the opportunity to rehearse the future, scenarios enable an organisation to adapt more quickly to what is happening and to better anticipate what could happen;
  • objective is not prediction but influencing better decisions;
  • helps strike a balance between prediction and paralysis. They do not pinpoint future events; instead, they highlight the major forces that could push the future in different directions.

The psychology component of scenario planning is important as the real task of the scenario planner is not to produce a documented view of the future business environment 5–10 years ahead, but to present other ways of seeing the world, and show people the significance of information they would otherwise have completely overlooked or considered irrelevant.

Scenarios structure data about the future:

  • in multiple stories that reflect the uncertainty inherent in the future,
  • that have been derived using a multi-disciplinary approach,
  • present the information in a tangible real-world context, and
  • use a cause-and-effect mode of thinking.

The aim is to produce a set of three or four scenarios

  • that illuminate the major driving forces,
  • their interrelationships, and
  • the critical uncertainties.

The real future will not be any single one of the scenarios; it will contain elements from all of them.

One of the basic premises of scenario planning is that, given the impossibility of knowing exactly what will happen in the future, a good decision or strategy to adopt is one that would work well in any one of a number of possible futures.

 

References

Bates, S. (2000) Scenarios: Their Use as a Decision making Tool at Forest Research. White paper. Forest Research: Rotorua. 25pp

Schwartz, P. 1991: The Art of the Long View. Bantam Doubleday Dell, New York. 272 p.

van der Hiejden, K. 1996: Scenarios: The Art of Strategic Conversation. John Wiley and Sons Ltd, Chichester. 305 p.

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