1
Forward, into the Unknown:
why scenario planning?
Several years ago, an office worker in Tokyo dropped dead at his desk and wasn’t discovered until five days later. This was despite the fact that his co-workers regularly walked past and said hello. In a similar incident, a 51-year-old had a heart attack in an open-plan office in New York on a Monday morning, but nobody noticed that he was dead until Saturday, when a cleaner attempted to wake him up. Apparently it wasn’t unusual for the man to be there because, according his boss — without any hint of irony — ‘he was always the first to arrive and the last to leave’.
Is this the future? Is this how things will eventually end for many of the so-called free agents inhabiting anonymous desks inside vast corporations, or for the emerging class of digital nomads tethered electronically to virtual offices via a compote of Blackberries and Apples?
The answer is no; it is one possible future, but there are also many others. One future might be a cross between Terry Gilliam’s Brazil and Fritz Lang’s Metropolis: a dystopian world where people are forced to work longer hours for large bureaucracies in a futile attempt to earn more money to offset rising food prices, higher energy bills, declining real wages, increasing debt, and disappearing retirement. Conversely, people might willingly choose to spend more time inside lifeless cubicles at work because, while the work is mind-numbing, they feel increasingly isolated and uncomfortable at home. This could be because the family, as a building block of society, has atomised, and more people are living alone; or because work offers more satisfaction and companionship than modern relationships. Add a pinch of ubiquitous media; autocratic, data-driven governments; CCTV; predictive modelling; brain-to-machine interfaces; genetic prophesy, to predict future health; and technologies such as global positioning systems (GPS), radio-frequency identification (RFID), and facial recognition, and, while it isn’t quite George Orwell’s 1984, that world could be seen as getting closer, not further away.
Alternatively, we might see a move in a completely different, and much more utopian, direction. Maybe we’ll start to realise that there’s more to life than dropping dead at a desk, and people will begin to fight to rebalance their lives in their favour. Perhaps automation — especially robotics and artificial intelligence — will finally deliver on the promise of a leisure society, and people will spend more time reconnecting with their families and doing the things that really interest them. This could also be a world where the state limits freedom of choice in areas such as healthcare and pensions, and provides a higher degree of security in return for higher direct or indirect taxation. It could be a sustainable world driven as much by the heart as the head, where local forces start to push back against globalisation and where new technologies are carefully scrutinised for their long-term social impact and value; an ethically driven world, where physical community is rediscovered and corporations are restrained due to, among other things, skills shortages, the high cost of energy, and limited raw materials. Such a world would not be dissimilar, in many ways, to the one described several decades ago in Ernst Schumacher’s Small is Beautiful: economics as if people mattered.
And there are many other possibilities, many other paths and other futures, too. How, for example, might an oil price of US$200 per barrel change the world? Perhaps people and products would move around less frequently, or the high price of food would lead to an unexpected decrease in obesity. What if we invented a new technology based upon photosynthesis that made energy almost free? What if a new ideology capable of challenging free-market capitalism were to appear? Or if the next Russian Empire decided to broaden its borders beyond their current limits? What could happen if the heavy use of mobile phones (of which there are already more than five billion worldwide) started to cause the deaths of tens of millions of young people through brain cancer, after a long and largely invisible gestation period?
Imagining the World We Want
There are many ways in which we can begin to think about the future, but looking backwards to see how we got to where we are today is a good place to start. This is partly because we can trace how what happened a long time ago has influenced our immediate past and our present. It is also because what has already happened can influence what happens next — in understanding the complexities of how we got to where we are, we will be better served in how we think about the future. For example, to understand the future of Greece properly, one might need to consider the impacts of the Ottoman Empire, German occupation during World War II, the civil war of the 1940s, and the influence of the junta that took power in 1967.
Of course, history is not always the most reliable guide to the future because nobody owns the facts. The way we interpret the past can cast a long shadow that hides other important details. So looking at the past alone is not enough to allow us to imagine the future. The future is buried in the fringes of the present, which means that it can also pay dividends to know how to examine the world around us now: to know precisely where to look for emerging trends, or who to talk to about the way in which things are developing. This can give you a useful start compared to less creative and less curious thinkers. Whichever way you look at it, it’s worth remembering that the future is always present, as well as having seeds in the past.
Let’s get back to the two dead bodies. Both of the stories about workers dropping dead at their desks were featured in newspapers and on television stations around the world. They were widely circulated on the internet, too. But both were untrue — they were urban legends, pure fictions. So why did so many people believe them? One answer is that people were focused on other things and accepted the stories at face value. Another explanation is that these stories are fables or legends that tell us something about the way we live today. They confirmed to many people a particular point of view about the present and, especially, the future, which is the nagging doubt that perhaps we are spending too much time at work and that if we suddenly stopped doing whatever it is we do, nobody would really notice. They also expose a deep fear, which is either that we are not doing anything that makes a real difference, or that we will not be missed or remembered — possibly the element of the future that we care about the most, but think about the least.
Herein lies the problem. We all have different views about the future, what we hope to achieve, and the direction in which we are heading; but we are all susceptible to being hugely misled, not only about what is happening right now, but also about what is likely to happen next. Yet unless we can think coherently about the future, it is likely that we will be held hostage by a world not of our choosing, and that our current choices will be restrained by events and situations that are either untrue or have not yet happened. Look, for example, at the way in which an increasing number of institutions and individuals adopt worst-case scenarios as the most likely outcomes. It creates large amounts of anxiety for them. But if these same people are given a choice of several outcomes, rather than assuming just one, such anxieties tend to evaporate.
So how can we all deal with this ambiguity and uncertainty effectively? How can we hedge against so many variables, ranging from the economy and politics to technology and nature? Furthermore, how can we challenge specific views about how the future will unfold? How can we stop ourselves from falling prey to ‘facts’ that appear to confirm seemingly self-evident truths? How can we restrain ourselves from conveniently extrapolating a future from an ephemeral trend, or from seeing the world as it is, or may soon become, through a narrowly focused — and at times rose-tinted — lens?
There is also the problem of what Harold Macmillan, the former British prime minister, referred to as, ‘Events, my dear boy, events.’ What are the greatest threats that we will face in the years ahead, and how can they be anticipated?
The answer is that we can’t anticipate every threat, and we cannot hedge against all of the variables or consistently distinguish truth from fiction — not precisely. But we can, nevertheless, dream up and play some useful games of ‘what if?’, and analyse in some detail what our reactions to certain events might be. This won’t always work, of course. We will still get caught out, but it’s better than not thinking about the future at all. The process of engaging with the future allows us to heighten our peripheral vision, so that the content of some new events no longer surprises us — even though their timing may be unexpected.
Seeing Tomorrow’s Problems Today
It takes time — which is in very short supply nowadays — to think seriously about and plan for worlds to come. More often than not, especially in commercial organisations, the focus is on the next 12 weeks (the next financial quarter) or the next 12 months (annual results), figures that are compared to those of the year before. But thinking creatively beyond this, especially ahead 36 months or more, is relatively unusual. As a result, many organisations focus almost exclusively on short-term problems, which means that their reactions are often immediate, and ‘management’ consists of racing from handling one crisis to the next. And deep questions, along with longer-term opportunities and risks, tend to go unanswered or unexamined until too late.
This is not just a concern for businesses. For example, how many of us defer thinking about pensions and superannuation until way past the ideal start date? This sort of laxity occurs on a global level, too: the economic rise of China (one of the few nations that does think much further ahead) went largely unnoticed by many for years. In the 1990s, world economic forums would get excited by China, but would soon revert to the old concerns about NATO, Japan, and the tensions in Europe. While they’re now slowly seeing the opportunity that the nation presents, the risk of a potential economic reversal in China, with associated bubbles and concentration risks, is not being seen. The same could perhaps be said for fertility rates, the effects of new technology on employment, or the impact of social media on democracy.
It is no wonder that so many individuals cling resolutely to the past — it’s much easier that way. Similarly, it’s hardly a surprise that so many institutions structure themselves to deal with the immediate present — it’s much cheaper that way. Yet by the time the relevant strategies are in place, the horse has bolted and we are already somewhere new. Most organisations create strategies to deal with yesterday’s problems. But thinking about the longer-term future is fundamental if we, as individuals or organisations, are to take full advantage of the myriad opportunities that lie ahead. Unless we want to end up standing on the wrong side of history, it is essential for all of us to develop an awareness of emerging risks, and try to see tomorrow’s problems today.
All well and good, we can hear you saying, but how can one sell the idea of thinking about the future, or futures thinking, to an organisation run by someone who is focused on the set of numbers that will take shape over the next 12 weeks? The honest answer is that you can’t. However, if you are fortunate to work for a company with an incoming or outgoing head, there is hope. These leaders tend to be concerned with creating a vision or leaving a legacy, both mindsets that fit well with futures thinking.
Furthermore, dark clouds sometimes have silver linings. In our view, a critical function of leadership is to embrace the plurality of opinions — of diverging worldviews — in order to have a better chance of making sense of the future. The recent history of reactions to climate change is a case in point. If an organisation is facing an extinction event (such as the advent of new technology, changes to government regulation, or a shift in customer mindsets that mean that current products, services, business models, or margins appear doomed), this is often precisely the time when closed minds can be opened up to new possibilities.
One of the features of good leaders is that they have an understanding of the past and the present. They comprehend the historical reasons for failure and success, but they also appreciate at least some of the challenges that lie ahead, both immediately and into the future. Outstanding leaders do something else, too: they have a vision for a longer future. More often that not, they see things that others can’t and, while their vision may be partially obscured, they are often able to create and communicate compelling stories about why other people should follow them down a particular road. Good leaders can play a role in encouraging others to think about the long-term future.
But a word of warning: there can be a fatal flaw, and that is when individuals and organisations end up being held hostage to a particular point of view or a fixed vision of the future. The more dominant a leader or organisational culture, the more people will be drawn into agreeing with the dominant view, and the less they will seek to challenge it or the hidden assumptions upon which it is built. The more credible or powerful a source, the less likely we are to think that something they say may be wrong. The more popular or widely circulated an idea, the more likely we are to agree with it, especially if we are busy. Be aware of this as we continue into the realm of futures thinking.
Planning Is Better Than Prediction
There is a danger at this point that many readers will be feeling a little lost, because we are heading away from a world of solid numbers and hard facts to worlds not yet dreamed up or perceived by most people. Some of you may be thinking that this all sounds too ethereal or theoretical. Well, remember that hard numbers are always historical (by the time they’re produced, they’re old, to some degree) and are usually open to interpretation. Remember, too, that for many people the pace of everyday life is accelerating. We have more to do, but we have less time to do it in. We are also more distracted, and systems are becoming more networked, so the number of opportunities to get things really wrong and to create cascading failures is increasing, not diminishing. It is necessary to look forward, especially when things are moving very fast. Indeed, one might argue that the faster things move, the further ahead we need to look so as to avoid nasty accidents. In our work with organisations across the world, we have also come to the conclusion that effective short-term strategies have the longer term embedded within.
Still somewhat sceptical? Then we’ll start the ball rolling with a brief history of future gazing. We’ll skip over a few thousand years of seers and instead focus on the doers, starting with the military. The idea of scenario planning has its origins in war-gaming, or battle planning, in the late 1800s. There are clear links to games such as chess, which almost certainly grew out of a sixth-century Indian game called Chaturanga, meaning ‘having four divisions’, and inspired Kriegsspiel, a German war game invented in 1812. Kriegsspiel is especially interesting in this context because the Prussian victory over the French in the Franco-Prussian War of 1870–1871 is sometimes credited to the Prussian officers using Kriegsspiel to train. Military war-gaming continues to this day, and is used to simulate unexpected enemy tactics or the unwelcome intrusion of factors such as weather.
All war-gaming was originally conducted in-house, but as needs grew so did a number of external consultants — such as the RAND Corporation in the United States, which was partly responsible for developing early game theory. Simulations were further developed by the Hudson Institute, notably by Herman Kahn, who resigned from RAND to create the Institute. It was he who popularised the term ‘scenario’, partly, we assume, because of its narrative flavour. As Kees van der Heijden points out in his book Scenarios: the art of strategic thinking, the term represented Kahn’s belief that he did not make predictions, but instead created stories about the future for people to explore. It all sounds very Hollywood, and indeed it was: Kahn was among Stanley Kubrick’s inspirations for a central character in the classic war film Dr. Strangelove.
The best-known example of scenario planning in business is probably Royal Dutch Shell, who used what were effectively sophisticated simulations to consider the impact of a number of external variables, including demographics, politics, resources, and technology, on long-term capital expenditures. The central figure in this was Pierre Wack, who introduced the idea that while many things are unpredictable and uncontrollable, order can be brought to other uncertainties — at least in the sense that we can rigorously debate known unknowns. He also provided us with the essence of learning from the future when he described the benefit of scenario planning as ‘the gentle art of re-perception’. By going out and exploring the wilder shores of turbulent future environments, we suddenly see the present in a new light; we see the world differently and engage with it in innovative ways.
Whether it was skill, luck, or a mixture of both, the scenario team at Shell developed a set of scenarios, including one that foresaw the 1973 oil crisis when the other major oil companies did not. This obviously put Shell in a rather favourable position in terms of preparedness, but it was perhaps not the main point of the exercise. The aim of Shell’s early scenarios was largely to determine whether investment should be made in certain very expensive projects. The idea was not to forecast a variety of alternatives futures, but rather to ensure that current strategic plans would hold up across all foreseeable scenarios.
In other words, the purpose of scenario planning is, more often than not, to travel into the future so that we are able to re-perceive the present. Its role is disruption. With hindsight this may not sound all that dramatic, but it was a significant breakthrough at the time, much as the adoption of a scenario mindset still is today in many organisations.
The problem with traditional forecasting, in a nutshell, is that it contains too many unchallenged assumptions. Why could this be the case? One reason is that strategy inside many organisations relies on convergent thinking: people look at an operating environment and immediately start to make a number of assumptions. The first assumption is that they can control more things than they actually can. The second is that they need to focus most of their attention on internal concerns, to the exclusion of external forces. The third, and often most fatal, is that they look at the present and assume that things will progress in an orderly fashion or along a straight path more or less forever.
For example, when it comes to making forecasts for supply or demand, many people will take a high–low approach: they will draw a graph showing historical supply or demand and add two new lines, one higher and one lower. But this misses curve balls and paradigm shifts, caused either by the impact of new events or by unusual and sometimes even counter-intuitive combinations.
Look at the story behind figures one and two, for instance.
The graphs show a series of forecasts, up until 1990, for the number of active oil rigs, as predicted by an oilfield supplies company in the early 1980s. Three separate forecasts — high, medium, and low — are shown as lines 01, 02, and 03. The creators of these graphs saw these three outcomes as alternative scenarios, but they were not. They were, in effect, sensitivity analysis on one scenario. All three are essentially the same, and show orderly rises and falls.
Why did the forecasters get it so wrong? The answer is that all of these predictions were based on past experience. They were logical extrapolations; but what nobody foresaw at the time was that what looked like a long-term trend was in fact a short-term situation based upon a high oil price, low interest rates, and government subsidies for drilling. When the US congress removed the tax incentive to drill for oil, the market collapsed. The oil-drilling planners failed to distinguish between an anomaly (a boom between 1980 and 1982) and normality, or to remember that while all of our knowledge is about the past, all of our most important decisions are about the future. In other words, they extrapolated from a series of short-lived trends without thinking about whether the trends were in fact a short-term response to deeper drivers of change. When the tax incentives for drilling were removed, reality changed direction.
This story underlines the major flaw in quantitative forecasting based on the past: it can only be wrong. The mind boggles at the number of executive hours wasted globally each year on creating forecast-based strategies and then searching for explanations as to why they did not eventuate, only to replace them with revised forecasts that repeat this fatal flaw.
History, as author and security and intelligence expert George Friedman has pointed out, ‘can change with stunning rapidity’. While there are many trends and traits that at first glance look set to continue for the immediate future, nothing is ever certain. As the writer J.G. Ballard put it crisply: ‘If enough people predict something, it won’t happen.’ If the Chinese economic miracle were to come to an abrupt end, for example, this would create a very different future than one in which it did not. Therefore, probability is of limited value when engaging with the future. The future is not at the end of a trend line.
The history of prediction is interesting in this context. It is littered with false prophets, much as it’s strewn with false profits, and it is important to distinguish between what is probable and what is possible. The best way of doing this, as the fictional detective Sherlock Holmes once pointed out, is to start by removing whatever is impossible, and whatever is left, no matter how improbable, must be considered possible.
So what can we do to address this problem? Is there any point in trying to predict the future, or is it best to just sit back and let it unfold?
Letting the future happen is actually not a bad option, but only if you are nimble and open-minded — if you are a quick thinker and can react speedily, then a fast-follower strategy can work well. But most individuals and organisations are not especially nimble, nor open. They tend to be closed to the outside world mentally, and stuck with a set of beliefs that were created by relying on past experience. Organisations, in particular, are constrained by legacy issues, systems, and assets that make it extremely difficult to change direction in a hurry. Much better then, surely, to have some advance warning and to be able to discuss what could be done should conditions change. To use a military saying, to be forewarned is to be forearmed.
More than that, organisations need to learn to adapt to an increasingly turbulent external environment. Making a series of well-informed guesses — questioning what is happening and why this could be so, and then questioning where things may go next — is an excellent way to engage with the future; so too is tracking a series of alternative scenarios, in case one alternative becomes reality. However, well-prepared organisations can still be vulnerable to fast-changing events. An essential skill for organisations is to learn when to change practices and behaviours, and to have contingency plans in place.
Organisations can do more than respond to the world around them — they can also seek to change it. Leaders should lead. Every senior executive we have engaged with over the last 20 or so years wants not only to be quick, rather than dead; they also want to make a difference, to change the world in which they find themselves. And in order to make a difference, to generate change and not just respond to it, there is nothing better than foresight to create a clear vision of what can be achieved. The best way to do this is to tell a compelling story about what the future could look like if we take a certain path.
In other words, while prediction is impossible, invention is not. Leaders and their organisations need to pick a future that they passionately believe in and start building it. This is not easy. Things of substance never are. But if we, as individuals, households, corporations, countries — even the whole planet — could agree on where we want to be in the future, while at the same time being prepared for other eventualities, we would soon start to re-perceive the present, and the future would be a much better place for all concerned to live.
The Scenario-planning Sales Pitch
Many people, including both of us, are concerned about what might happen in the future. The continued success of most businesses or organisations depends on what might change. Let’s imagine that you are trying to persuade your colleagues of the virtues of scenario planning.
What is scenario planning? It is a unique and rigorous method of thinking that allows people to see into the future logically, systematically, and realistically. It involves several stages, in which research, interviews, reports, analysis, brainstorming, and strategy all play a role. Scenario planning is primarily used as a resilience test for strategy, but it can also provide a framework for innovation and risk analysis. It has benefits for both creative and analytical thinkers because it draws on imagination and visualisation as well as a range of logical-, lateral-, and numerical-thinking skills.
The process is generally undertaken by a hand-selected group from within an organisation, and it’s an excellent way to build relationships between team members. It also ensures that everyone — whether they are directly part of the planning process or not — can be on the same page when it comes to what the organisation represents, where it may be going in the future, and what might need to be done to prepare for a range of possible futures.
Scenario planning is valuable because it provides a conceptual framework, within which anyone can evaluate complex strategic concerns that they feel unsure about. Most people are trained to be decisive in the way that they approach business problems, and they often reject uncertainty by relying on the past as a guide. Scenarios, in contrast, embrace uncertainty. And in doing so, they promote open-minded and rich discussion. This, in turn, can give rise to practical suggestions for action from the diverse group of multi-skilled individuals who have been chosen to take part.
Scenarios are also valuable in setting the context for strategic planning and decision-making. As business and organisational futures seem so difficult to predict, you can employ scenario planning to make as much sense as you can of the forces for change, the trends and critical uncertainties ahead, and the likely responses of competitors, customers, and policy-makers. Scenarios are a wonderful mapping tool.
Who Should Be Involved?
Most scenario-planning work is focused on the needs of specific organisations — a government department or a public company, a charity or a utility, an educational establishment or a profession, and so on. In order to make the content of this book relevant to the widest possible readership, we have used generic stakeholders and generic questions about the world in 2040. Were our topic the future of financial services or the future of the fashion industry, for instance, the range of people who would derive direct value from our study would be more limited, and our questions would be more targeted. But the big-picture approach disguises some of the critical decisions anyone will need to make if they are applying scenario thinking in their organisation. And one of those is who should be involved in the process.
The most important first step is finding a champion with real power in the organisation: a CEO or C-suite executive, a head of department or the top strategist, or members of the organisation’s leadership team. It’s difficult to ‘sell’ the idea of scenario planning to a hostile audience. You need someone, somewhere, who already believes in the power of scenarios, either because a peer has raved about it, they’ve done it before, or they’ve studied it.
Once you have buy-in at the top, you then want to populate the foresight team on a non-hierarchical basis, with a strong emphasis on people who have a passion for the future and will want to be involved. Both left-brain and right-brain thinkers should ideally be included. In one project, in which we studied the future of the school-teaching profession for a government agency, we invited teachers and principals to write us a short statement as to why they wanted to participate. This deliberative approach tends to yield much stronger results than a hierarchical process, in which people come on board because of their status as representatives of this group or that.
Ideally, some degree of external assistance should also be sought — not because scenario planning requires any unique insight from a professional, but because a degree of objectivity is required to maintain the correct distance between woods and trees.
How Long Does It Take?
A complete process will take a minimum of three months, and we like to have up to 12 months to do it really well. And, of course, once the initial process has been completed, you are ready to implement plans for continual review and revision.
This might sound like a big commitment in terms of time and money, and of course it is. But the benefits of good scenario planning far outweigh the resources spent. If the future of your business or organisation depends on staying ahead of the competition, as it does for many of us, then what more sensible investment could there be than spending time to plot out the likely future directions of the world, and working out how to prepare for and respond to certain events? In one sense, the questions for an organisation or business to ask themselves are really whether they can afford not to undertake some form of scenario planning, and whether they could cope if they were taken by surprise by a sudden shift.
When you have created your scenarios, you will see how to plan your future much more clearly. This new understanding might feel simple and obvious. But do not be fooled. No-one cannot reach a meaningful destination without struggling with the incredible messiness of pre-scenario reality, and that is why the process takes time. There are no shortcuts in scenario planning. But a scenario-planning process that does not lead to a dynamic, ongoing, and heightened awareness of alternative futures will have failed in its objective to improve the quality of thinking in the business or organisation.
A good set of scenarios, providing that their outlook extends at least ten years into the future, will be valid for two or three years, as long as they are revised periodically. Thereafter, it is wise to think of preparing a ‘new edition’ from a zero base.
How Far into the Future Do We Need to Go?
Before you establish a question to investigate in relation to the future — or, indeed, questions, as there is no limit to the set of concerns you might wish to bundle together — you need to lock down the scope and timeframe of the inquiry. The scope is usually determined by the ‘system of interest’ that is running the scenario-building exercise. We use this phrase, which possibly originated in the work of American philosopher C. West Churchman, to recognise that the group who undertakes the task of thinking about the future is itself bound by an external environment, which both impacts on the organisation and on which the organisation exerts some influence. This relationship is systemic rather than mechanistic, as the cluster of connections creates some predictable, but many surprising, outcomes.
In the work we have done over the last 20 years, our clients have ranged from individual corporations to distinctive social groups to nations. The type of organisation also necessarily influences the scope of the project. If, for example, you work for a retail bank interested in the future of financial services, the scope of the inquiry will be very different than that for a central bank, let alone for a customer of a retail company. The current concerns with the future of the euro prompt very different foresight practices for NatWest in the United Kingdom than for the European Central Bank or the Bank of Italy, or even for the Icelandic local council in Reykjavik.
The timeframe for a scenario-planning project is also critical. There is no ‘one-size fits all’ answer to how far out we need to go; it depends on the concerns of the client system of interest and the volatility of the environment in which it operates. Power generators and city planners, for example, need to take a much longer view, as their infrastructures are so slow to change. People in information and communications technology or pharmaceuticals are confounded by much shorter timeframes, as technological innovation and macro-economics conspire to reduce the life cycle of new products to increasingly shorter time periods. And if your interest is the future of foreign exchange markets or interest rates, you might well find it difficult to go out beyond five years.
As a general guide, it is often questionable whether going out less than three years into the future is really worthwhile because it’s unlikely to take your thinking anywhere different. Moreover, traditional planning and forecasts should be covering this timeframe already. While clients sometimes question going out more than 30 years on the grounds of practicality, it’s often the case that the further you travel the more you will see. In our experience, in order to get people to think rigorously about the future, you need to push the timeframe out quite a bit. This could become a pointless exercise if the scenario-planning group’s thinking remained concentrated on the future, but remember that the final stage is always to bring things back to the present day by mapping future scenarios against current strategy to explore strategic options in the here and now. In addition, the further out the thinking goes in terms of time, the more radical and probing the thoughts about the present can become, and you can often end up with an epiphany about strategy that logic or trend analysis alone would not have led to.
What Are the Benefits?
Scenario planning offers several rewards. One of its aims is to improve the quality of thinking in a business or organisation so that it develops better, more adaptable strategies. A good scenario-planning process is designed to give an organisation a heightened awareness of the future, and to increase the ability to see how its reason for being, or ‘business idea’, is aligned to the logic of the potential futures. The process can also help to sweep away old, irrelevant perceptions that are nevertheless often very ‘sticky’. In addition, it is designed to build the strategic competence of teams throughout the business or organisation, fostering a shared understanding of the challenges facing the company in the future. It will help to identify new skills that will be required in the future, and will reveal how sustainable the existing competitive advantage of the business might be.
By building scenarios, you can:
By completing scenarios, you can:
By moving from scenarios to strategy, we can:
We used scenario planning to develop four scenarios for this book, which we’ll present to you in the next five chapters. Part II explains the process that we used to develop these worlds and the chain of events that could make them possible in reality, as well as some implications for specific industries and professions. It also explores the methodology of scenario planning, detailing the steps involved.
So now, come with us as we introduce to you the four futures — four ways in which the world could end up looking in 2040.