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Scenario Planning: The Eight-Step Process

It has two parts, with the first five steps, concentrating on which particular scenarios to work on, and the rest three steps towards the story, implications and indicators.

  1. Focal Issue: identify what to focus on.
  2. Key Factors: brainstorm about the various factors influencing the focal issue. There can be numerous obvious factors and further digging can discover the less obvious, hidden ones.
  3. External Forces: there are always certain remote, unseen forces that operate on the focal issue, and can be geopolitical, economic, social or technological. This may result in 70 to 80 key factors/external forces.
  4. Critical Uncertainties: by combining all forms of key factors by implementing a divergent process, the next step is to converge by allocating priority votes to the importance of each factor and the degree of uncertainty.
  5. Scenario Logics: a decision is taken on which potential futures out of the curated list are to be developed into a detailed scenario.
  6. Scenarios: the eligible (top trending) scenarios are then turned into a story by a single author.
  7. Implications and Options: fact check and stress-test each of the scenarios is set up after a few weeks.
  8. Early Indicators can be easily found in consumer behaviour or stock price fluctuation.

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The Good Scenarios

While providing a set of scenarios, four is a good number to showcase a rich set of plausible futures.

  • They should ideally have the details of the likelihood or probability of the success or failure and be customized to fit the context.
  • Events of the past a...

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Strategy Vs Scenario

A strategy is always developed with a set of scenarios studied and selected. It requires common sense as well as experience.

Example: A strategy can be an aeroplane, and the scenarios can be the conditions under which it can fly, or which it can crash.

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The Crystal Ball: Probing The Future

The Crystal Ball: Probing The Future

The tools of probing the future (strategic forecasting) include microscopic as well as macroscopic components.

Geopolitical forecasting is the study of alternate futures, taking signals from the noise of todayโ€™s stories, developments and decisions.

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How to use scenario planning

  1. Identify your driving forces: the big shifts in society, economics, technology and politics in the future and see how it will affect your company.
  2. Identify your critical uncertainties: pick 1-2 of the driving forces (with the most impact).
  3. Develop a range of ...

Scenario Planning

Scenario Planning

Managers who can expand their imaginations to see a wider range of possible futures will be much better positioned to take advantage of the unexpected opportunities that appear.

By identifying basic trends and uncertainties, a manager can construct a series of scenarios that will ...

Attributes to succeed in uncertainty

Organizations should be inclined toward action. As a baseline, companies must strive to be fit for growth. This can be done by aligning costs with priorities and strategy, investing in varied capabilities, and using traditional and digital levers to execute.

They must regu...

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