Scenario planning


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Scenario planning

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