Scenario planning is not focused on the organization its. Scenario thinking is a strategic planning method that organisations use to make flexible long. Using scenario planning to prepare for uncertainty in. Overcoming obstacles to effective scenario planning mckinsey. Scenario planning guidelines introduction scenario planning can also involve the use of newer tools that actively involve the public in envisioning possible futures, while at the same time developing evaluation criteria to help quantify the costs and benefits of different scenarios, e. It is designed to embrace complexity and uncertainty, allowing decision makers to evaluate the organizations flexibility, resilience, or robustness across a range of potential outcomes. This manual addresses the concepts and processes of scenario planning, scenario process procedures and tools applied for the learning processes and generation of scenarios. Scenario planning has value in any situation in which there is significant uncertainty about aspects of the future that could materially change an organizations strategy, plans or decisions. Technically, a scenario set is a medium through which a scenarist shares with the scenario users convictions about the landuse futures of an area. Therefore, any organisation considering investing time and money in scenario planning needs to consider and agree with the following before proceeding. It differs from other strategic planning methods, such as contingency planning, sensitivity analysis, and computer simulations. Pdf this note introduces and describes scenario building, the strategicthinking approach developed by pierre wack and associates at royal dutchshell. An introduction to scenario planning page 6 of 22 principles scenario thinking is both a process and an ongoing approach to strategic thinking.
Download it once and read it on your kindle device, pc, phones or tablets. Providing insight for impact scenario planning is a management tool that is designed to allow organizations to evaluate the efficacy of strategies, tactics, and plans under a range of possible future environments. It is important to note that scenarios may be used in a. It was developed by the united states military in the 1960. Scenario planning this chapter begins to focus on the final objective of the study, that is, engaging water supply stakeholders in water futures scenario workshops to develop water scarcity scenarios and to discuss likely water district responses to such scenarios. On strategic planning nothing lasts forever and no product or service sells itself for long. Scenario planning a tool for navigating strategic risk. First popularized by shell in the early 1970s, the approach should be a natural complement to other ways of developing strategyespecially when executives are as concerned about geopolitical dynamics as many are today. This mag will focus on the practical application of scenario planning tools and techniques. A note on scenario planning background note harvard. Building and using scenarios can help us explore what the future might look like and the likely changes of living in it.
The scenarios based approach to strategic planning is an open and creative approach that considers multiple strategy options a\. Few companies today would say they are happy with the way they plan for an increasingly fluid and turbulent business environment. Scenario planning is the combination of scenario analysis. Generating insights by creating a small set of scenarios for an organizations future environment that are. Garvin and lynne levesque describes the process, components, and detailed action steps involved in using scenario planning in any organization. A note on scenario planning 1 background scenario planning is a process that stimulates imaginative, creative thinking to better prepare an organization for the future. There should be at least 3 cards, with the maximum equal to the total number of group members if each can play a unique card. The authors, experienced in case study design, development, and method for teaching in an mba program, used the case study approach to create a scenario planning strategy to analyze a companys product and move the company through its. Scenario analysis is a strategic planning tool to help an organization understand how it might perform in different future states. Shell also develops shortterm scenarios, for 2 to 3 years hence. Scenarios are hypotheses of alternative futures designed to highlight the risks and opportunities involved in strategic issues and assess strategic decisions 8. A tool for strategic thinking final case summary by wanyi chow introduction. The peopleready business scenario planning and the future of education 1 scenario planning and the future of education by daniel w.
This exercise demonstrates the essence and value of scenario planning and enables students to. Scenario planning is a good way to question the future. Please note that access to the published version might require a subscription. Teams are formed, an organization is selected, and a list of strategy questions is prepared and narrowed to each teams overriding big question. While the approach has a long history, it burst into the news in 1973. Scenario planning can, if used and incorporated appropriately, help an organisation better consider and prepare for the future. A field guide to the future kindle edition by wade, woody. Planning scenarios executive summaries created for use in national, federal, state, and local homeland security preparedness activities the homeland security council david howe, senior director for response and planning july 2004.
Use features like bookmarks, note taking and highlighting while reading scenario planning. When scenario planning has worked well, it has proved enormously useful to a wide range of organizations as a tool for making decisions under uncertainty. This note introduces and describes scenario building, the strategicthinking approach developed by pierre wack and associates at royal dutchshell in the 1970s and helped catapult the company from. National planning scenarios fact sheet femas mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all. To be effective, scenario planning must be focused ideally around a material question or issue that needs to be answered or understood. The following is an overview of the scenarioplanning process presented by schwartz 1991. Issues and drivers the first step is to identify one or more.
Erste allgemeine versicherung, the austrian insurance company, anticipated the fall of the berlin wall and entered new markets in central europe. In short, it is a perfect tool for todays increasingly uncertain and volatile world. Scenario planning serves as a guide to looking at your business, and the world, years from now, posing thoughtful questions about the possible consequences of current and possible future trends. The product of scenario planning is a set of stories describing a range of futures focused on the strategic issues facing a company. Scenario planning is a strategic planning tool or method for improving decision making against a background of possible future environments.
Rasmus synopsis in 2006, microsoft developed a vision for the future of education that reflects the impact technology can have on. Scenario planning an increasingly critical tool in financial risk management and a pro,en contributor to strategy development and contingency planning in all types of organizations is clearly on the upswing. Instead of focusing on a single prediction extrapolated from. Its the difference between strategic hindsight and strategic foresight. Scenarios provide an overall picture of the environment and highlight the interactions among several trends and events in the future. Provides a vehicle for increased communication and shared learning.
In scenario planning, gill ringland 2006 has described a number of marketing case studies where scenarios were developed that effectively challenged the of. Scenario planning is a wellestablished tool in the business world and is now used with modifications in the field of climate change science. There should be at least 3 cards, with the maximum. Scenario planning is a structured framework to help managers identify actions that will be most effective across a range of potential climate change futures. Scenario planning sits alongside a number of other tools that can be useful in the strategic management process. Small businesses and large organizations have no alternative but to forerun the future, endeavor to shape it, and balance shortterm and longterm objectives. Scenario planning allows organizations to explore the world in which they operate. Scenario planning begins by painting a picture of the future at a given date say 2035 and usually for a given location. In simple terms, a scenario is an internally consistent account of how the business environment, the external environment, in which an organisation operates might develop and change over time. Scenario analysis is not designed to produce rigid predictions nor irrational. Also scenario planning is a tool which helps people to think in the future and to change their assumptions. Figure 1 shows different purposes of the scenario planning. The process begins by considering factors that might bring about change in the world, such as technology, social change, and environmental change. Get a notetaker in a small organisation, use volunteers to help organise.
Global scenarios are developed for the long term, usually 30 years into the future. This includes four training workshops across the pacity in climate. Simultaneously, it overcomes some of the weaknesses of traditional strategy plannin. They identify some significant events, main actors and their motivations and they convey how the world functions.
This places a scenario set in a unique strategic position that connects two streams of futureoriented human activities. Pdf training manual for scenario planning researchgate. Appendix a provides the survey and study of scenariobased planning best practices. Scenario planning is a practical tool for collective strategic thinking in organizations, especially when external uncertainty is high. Its overall purpose is discussed and two complementary. A guide to using this strategic planning tool for making flexible longterm plans. Scenario planning framework and success factors ross dawson.
How to do scenario planning changing river consulting. Scenario planning is a strategic planning method that organizations use to develop flexible longterm plans. If scenario planning is focused in old business, its purpose should be to evaluate existing strategies or products. Below are summaries of the key points in the overview page. Maji has a specific focus on using the concept or approach of scenarioplanning to help ensure planning processes and subsequent. Participants in a scenario planning exercise first conduct research to understand the major forces that might move the world in different directions.
A successful scenario planning process relies upon the knowledge and expertise of stakeholders within the community to guide the development of scenario topics. Building economic competitiveness in rural regions and small communities march 25, 20 presenter. It helps decisionmakers see opportunities and threats that could emerge beyond their normal planning horizon. Scenario planning has been used sporadically for more than forty years.
Scenario planning is a tool that can be used to forecast large scale societal changes and determine appropriate organizational responses to those changes. Scenario planning is a disciplined method for imagining possible futures that companies have applied to a great range of issues. Scenario thinking and usage among development actors. Schoemaker and others published twenty common pitfalls in scenario planning find, read and cite all the research you need on researchgate. Royal dutchshell has been the poster child of success using scenario planning to address the instability and uncertainty during the 1973 oil crisis. In recent years, interest in using scenario planning has significantly increased as organizations look at its application and potential value in navigating an uncertain future. First, ralph marra from southwest water resources c\. Moreover, scenario planning presents all complex elements together into a coherent, systematic, comprehensive and plausible manner. While the outcomes of scenario planning are unique to each community or organization, there is a general process that can be followed. Other guides that can usefully use this technique include risk management the scenarios being used to identify possible risks, portfolio management the scenarios being used to shape your portfolio and change management. Scenario planning is a process that stimulates imaginative, creative thinking to better prepare an organization for the future. The scenario planning journey water professionals are becoming increasingly aware of scenario planning as a tool to help manage uncertainty in turbulent times means and others, 2005.
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