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Scenario planning

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  • 1. Scenario Planning Nancy Pridal Pam Nienaber Dan Schaecher
  • 2. 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
  • 3. 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
  • 4. 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.
  • 5. 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.
  • 6. 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?
  • 7. 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
  • 8. 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)
  • 9. 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
  • 10. 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
  • 11. 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.
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. 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