| Definition |
Scenario Planning avoids the dangers of single point forecasts by allowing users to explore the implications of several alternative futures. By surfacing, challenging and altering beliefs, managers are able to test their assumptions in a non-threatening environment. Having examined the full range of possible futures, the company is well positioned to modify its strategic direction as actual events unfold. |
| Implementation |
The key steps in the Scenario Planning process are:
- Determine the models scope and time frame
- Identify the current assumptions and mental models of individuals who influence these decisions
- Create divergent, yet plausible, scenarios of how the future might evolve along with underlying assumptions
- Test the impact of key variables in each scenario
- Develop action plans based on either:
- - The most robust solutions that play well across scenarios, or
- - The most desirable outcome toward which you direct your efforts to create the future
- Monitor events as they unfold to test the corporate direction and be prepared to modify it as required
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| Purpose |
Through the use of the Scenario Planning methodology:
- Companies can achieve a higher degree of organisational learning
- Both implicit and widely held beliefs and assumptions about the business and its likely future are surfaced and challenged
- Key leverage points are identified
- Long-range planning becomes a vital, shared experience
- Management teams develop a distinctive, farsighted view of the future
- Alternative strategies have been considered so that companies are ready to respond purposefully to changes in the environment
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