What is Scenario Thinking?
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Scenario planning is a discipline for rediscovering the original entrepreneurial power of creative foresight in contexts of accelerated change, greater complexity, and genuine uncertainty. |
Why Scenario Thinking
Nowadays, decision-making has become far more complex than ever before, taking place in a fast changing, highly uncertain information-driven environment where values, behaviours, and social structures are no longer as stable and predictable as they were. The complexity of the environment undermines our ability to understand what the future will look like. Traditional planning and forecasting practices on their own are not enough to serve our needs in getting the insights and answers to the future.
Accountable decision making requires a high element of certainty - an adequate level of knowledge and confidence in our assumptions about that knowledge. Thus the ability for an organisation to critically review its assumptions on external developments and to incorporate thinking about external uncertainties in a structured way is of key importance. Scenario Thinking, introduced by Shell Group Planning in the 1970s, has evolved as a powerful methodology to enable groups to structurally anticipate change and incorporate external uncertainty into the internal decision making process.
What is Scenario Thinking
Scenario Thinking is a structured process of thinking about and anticipating the unknow future, without pretense of being able to predict the future or being able to influence the environment in a major way. Instead, it navigates through the uncertainties and large-scale driving forces that are impacting on the future. The objective is to examine possible future developments that could impact on individuals, organizations or societies, in order to find directions for decisions that would be most beneficial no matter how the future unfolds. The philosophy is to proactively think and plan for future developments instead of being a passive victim of change.
Scenario thinking always includes a number of possible future scenarios, thus preparing for many possible future events. Succesfuly used by many organizations and governments, Scenario Thinking has proven its worth in the past thirty years.
Benefits of Scenario Thinking
The benefits and applicability of Scenario Thinking process and methodology are broad and deep.
Scenario Thinking establishes a thinking process that enables change anticipation and preparedness, and evaluation and risk assessment across possible environments. Every decision making context – product development, marketing, finance, investment, strategic planning, human resources, policy – faces the challenge of responding to external factors, be they economic, social, political, technological or environmental. Scenario Thinking informs decisions by evaluating them in the context of possible futures.
Scenario Thinking Processes
The process of Scenario Thinking is widely recognised as a tool for planning and decision making under uncertainty. There are many different methodologies that go by this name and they vary considerably.
A Scenario Cycle is a presentation of a full scenario cycle, from articulation of the focal issue to the way scenarios are used to change an organisation and to transform strategic uncertainties from liabilities to assets.
However, it is worth noting that this sequence of steps does not necessarily represent an actual thinking process. This cycle is simply a sketch of scenario planning steps, rather than a thinking template. The world is complex and complex situations require a complex representation.
Useful Resource
Scenario Thinking - from shock learning to anticipatory learning
Global Future Report
Scenario planning basics for distributors This article provides a brief introduction to scenario planning for distributors and shows how to use this valuable tool in a company.
Scenario Development using Computer Aided Morphological Analysis From the Swedish Morphological Society