This document discusses scenario planning and foresight. It provides examples of past predictions that turned out to be wrong. Scenario planning is described as a way to consider plausible futures rather than making predictions. The key aspects of foresight are exploring options rather than planning actions and considering implications of possible futures. Scenarios are defined as possible narratives that provide context for decision making. The scenario planning process involves environmental scanning, identifying drivers of change, building scenarios, and considering strategic implications.

1. Scenario Planning

2. • “Inventions have long since reached their limit, and I see no
hope for future development”: Roman engineer Sextus Julius
Frontinus, 1st Century AD
• “Heavier than air flying machines are not possible”: Lord
Kelvin, President of the Royal Society, 1895
• “I think there is a world market for maybe 5 computers”:
Thomas Watson, Chairman of IBM, 1943
• “Space flight is hokum”: Astronomer Royal, 1956
• “Stocks have reached what looks like a permanently high
plateau”: Irving Fisher, Professor of Economics, Yale University, 1929
Things Change ...

3. • “We don’t like their sound, and guitar music is on the way
out”: Decca Recording Co. rejecting The Beatles, 1962.
• “640K [of RAM] ought to be enough for anybody”: Bill Gates,
1981
• “The fact that conflicts with other countries [producing civilian
casualties] have been conducted away from the U.S. homeland
can be considered one of the more fortunate aspects of the
American experience”: Quadrennial Defense Review (QDR) for the US
Dept of Defence, 2001
Things Change ...

4. What is Foresight?

5. • All our knowledge is about the past, but all our decisions are
about the future.
• We create our future by what we do or don’t do today; it
makes sense to try and understand as best we can what that
future might be like before we act.
• Foresight is not prediction!
It is about getting an idea about what plausible futures might
look like.
• We are good at learning from the past; we need to learn from
the future as well – we need to develop a ‘history of the
future’ as we do a ‘history of the past’.
What is Foresight?

6. Why think about the future?
What we don’t know we
don’t know
What we
know we
don’t know
What we
know
Most of what we need to know to make good decisions today is
outside our comprehension: we don’t even know it’s there.
All our knowledge is
about the past, but all
our decisions are about
the future.

7. Possible - “might” happen (future knowledge)
Plausible – “could” happen (current knowledge)
Probable - “likely to” happen (current trends)
Preferable - “want to” happen (value judgements)
Types of Futures

8. Types of Futures
Time
Today
Possible
Plausible
Probable
Preferable
Scenario
“Wildcard”

9. Types of Futures
Time
Today
Plausible
Probable
(Trends)
(Deep Drivers)

10. • So, foresight, put simply, is an approach to
thinking about the future which lets you:
– free up your thinking beyond the here and now;
– explore plausible futures (ie always more than one,
because “the” future is not pre-determined); and
– think about implications for decision making today.
• Foresight is a way of thinking that enhances our
understanding of our current – and plausible
future – strategic operating environment(s).
What is Foresight?

11. • An attribute, competence or process that
attempts to broaden the boundaries of
perception by:
– assessing the implications of present actions,
decisions etc.
– detecting and avoiding problems before they occur
(early warning indicators)
– considering the present implications of possible future
events (proactive strategy formulation)
– envisioning aspects of desired futures (normative
scenarios)
What is Foresight?

12. Three inter-dependent but quite different elements:
• Strategic Thinking
– exploration, intuitive, synthesising, creative, inductive,
disruptive, incomplete/ambiguous info; generating
options
• Strategy Development
– assessing options, examining choices, making decisions
and/or setting a destination or direction
• Strategic Planning
– implementation, analytical, deductive, making it
happen, getting things done, pragmatic, “can do”;
actions
Foresight, Strategy & Planning

13. • Foresight is a strategic thinking process,
not a strategic planning process.
• It’s about options not actions.
• Asks the question:
“what might we need to do?”
• not the questions:
“what will we do?” or “how will we do it?”
Foresight, Strategy & Planning

14. Inputs
Strategy
Outputs
Foresight
Expanded Perceptions
of Strategic Options
Strategy Development
Strategic Planning
“Foresight Work”
Strategic Intelligence Scanning
Copyright © 2000 Joseph Voros

15. Inputs
Strategy
Outputs
Analysis
Interpretation
“what might we need to do?”
“what will we do?”
“how will we do it?”
“what’s really happening?”
“what seems to be happening?”
things happening
Foresight “what might happen?”Prospection
Copyright © 2000 Joseph Voros

16. Inputs
Strategy
Outputs
Analysis
Interpretation
Prospection Foresight
Expanded Perceptions
of Strategic Options
Strategy Development
Strategic Planning
Scenarios
“Deep” Drivers of Change
(System Structure / Dynamics)
Trends, Issues, Themes
Strategic Intelligence Scanning,
Near-Future Context
Foresight Process
Copyright © 2000 Joseph Voros

17. • Scenarios are possible views of the world, described in
narrative form (stories) that provide a context in which
managers can make decisions.
• By seeing a range of possible worlds, decisions will be better
informed, and a strategy based on this knowledge and insight
will be more likely to succeed.
• Scenarios do not predict the future, but they do illuminate the
drivers of change: understanding them can only help
managers to take greater control of their situation.
Gill Ringland
Scenarios in Business, 2002
What are Scenarios?

18. Distance into “the future”
Uncertainty
Predictability
F S H
Forecasting Scenario Planning “Hoping”
Why Scenarios? (Ranges of Usefulness)
t
U
Adapted from K. van der Heijden

19. • Identify the focal question
• Environmental scanning – internal and
external
• Selecting drivers of change and ranking
• Building the scenario matrix
• Developing the scenarios
• Presenting the scenarios
• Considering the strategic implications
The Scenario Planning Process

20. Impact-Uncertainty Classification
I
m
p
a
c
t
Uncertainty
Low Moderate High
Low
Mod
High
Critical
Scenario
Drivers
Important
Scenario
Drivers
Critical
Planning
Issues
Important
Planning
Issues
Important
Planning
Issues
Important
Scenario
Drivers
Monitor &
re-assess
MonitorMonitor

24. • Robust - Perform well over the full range of
scenarios considered - “Blue Chip”
• Flexible - Keep options open and / or wait for as
long as possible before committing - “Hedging”
• Multiple Coverage - Pursue multiple strategies
simultaneously until future becomes clear -
“Scattergun”
• Gambling - Select one strategy which works very
well, but in only one or two scenarios - “Bet the
Farm”
Approaches to Strategy