Scenario Planning

When I mention scenario planning, most of my clients say, “I’ve heard of that. Isn’t it a type of strategic planning?”

That’s only partially correct. More important is the question, “Do you know when to use scenario planning?”

Scenario planning is an effective way of doing strategic planning when considerable uncertainty exists. In today’s world, scenario planning is obviously becoming a very important skill.

During scenario planning, senior organizational leaders are encouraged by a facilitator (typically an independent consultant) to imagine not just one probable scenario, but a variety of future possibilities. The goal is to craft multiple diverging scenarios. What emerges from the exercise is a range of choices based upon the opportunities and threats of each plausible future.

Should scenario planning replace all traditional strategic planning? No.

When is scenario planning appropriate?

• the industry is experiencing significant change
• competitors are using it
• few new opportunities appear to exist
• costly surprises have occurred in the recent past
• major differences exist among organizational leaders

In a 1959 Cary Grant movie called “Operation Petticoat,” Tony Curtis, who plays a charming but unscrupulous navy officer, says, “In confusion there is profit.” In today’s uncertain environment, there is great opportunity for organizations that take the time to explore a variety of scenarios.

To take advantage of future opportunities, it is necessary to project new core competencies, new product/service development, and new strategic alliances. This requires thinking outside of the current “box”; it requires exploring a range of possibilities. Keep in mind, each possible scenario has implications for organizational change, organizational learning, leadership development, and succession planning.

To read more about this and related topics, check out my website, www.mikebeitler.com.