It's difficult to make predictions, especially about the future.
- Niels Bohr, Nobel Prize winning physicist (1885-1962)
The Global Financial Crisis, the iPhone, Facebook, Uber, Brexit, President Trump...
The world today looks very different from how you might have imagined it only a few years ago. Nevertheless, decision-makers are expected to develop strategies that take their organisations well beyond the 'first' horizon.
Scenario planning helps decision-makers to successfully navigate the future; it allows organisations to have a structured conversation about the forces of change that are shaping the world we live in and the operating environment you have to compete in.
By doing so, patterns emerge and we can identify signals of change in a timely fashion - and adapt to them accordingly.
About scenario planning
First developed by the U.S. Air Force after World War II as a method for military planning, Royal Dutch Shell pioneered scenario planning in the corporate world to successfully navigate the oil crises of the 1970s, allowing its spectacular rise from being one of the weaker ‘Seven Sisters’ (the seven largest global oil companies) to becoming one of its strongest.
Scenarios are not attempts to predict the future. Nor do they try to articulate visions or desirable futures. Scenario planning is a method that, as a starting point, uses the uncertainty in the external environment that an organisation has little to no influence over, but which determines the environment in which it will ultimately have to operate.
Scenarios do not describe just one future, but rather a range of plausible futures that illuminate all the corners of the ‘playing
field’ in which we will need to operate and compete. A good set of scenarios will force us to critically assess our conscious and unconscious biases and help prevent us from being blindsided.
Despite not being predictions of the future, scenarios are particularly useful for having an informed dialogue about it. They provide structure in uncertainty, help understand how different planning assumptions may play out over time, and thereby support decision makers in formulating robust long-term strategies.