What Is Scenario Planning?
As any good Futurist will point out, our futures can never be known with any degree of certainty, given that we live in an age of discontinuity, and particularly so during periods of structural market change. What can be done, however, is to plot out several possible and likely scenarios that may unfold in the future. This allows a business to develop appropriate contingency plans around each of those scenarios.
This is known as Scenario Planning.
The aim of Scenario Planning is not to create the illusion of any particular scenario as being definitive, but rather to bound the future in a way that permits learning and that drives flexibility and adjustment as our futures actually do unfold.
Because we believe this is such an important and useful tool for securing the future health and relevance of a business, we undertake Scenario Planning for clients in the context of emerging market trends.
Using what is known from Insights Research and general Trend Watching, we map out each of several possible and likely scenarios the future might hold for a business. In each case, we examine the events that would unfold, the implications these would have, what actions your business might take, what would then happen were it successful with those actions, what would likewise happen were it not successful with those actions, and what fall–back plans it should have in place in each case.
We then do three additional things. First, we sort these different scenarios into an ordering based on their likelihood, starting from the most likely and ending with the least likely. Second, we identify those actions that overlap multiple scenarios. These are considered common actions that would be undertaken in each of the affected scenarios, sometimes because of, and sometimes in spite of, the unfolding scenario. Third and finally, we attempt to gather all of the appropriate actions, or some versions thereof, into a final set of recommendations based on the scenarios most likely to occur. This produces what is known as a "bottom–up" strategy.