Overview
Scenario planning can help users to assess strategy against a range of plausible alternative futures, with the scenarios created providing a context to help managers make reasoned decisions.
Also known as
- Scenario thinking.
- Scenario analysis.
The tool
Scenario planning offers a way to plan for a variety of futures, rather than focusing on a single one. It reduces reliance on trend-based approaches, so if the trends are disrupted the organisation may be able to respond more quickly. This helps to manage risk and to build agility into the way the organisation operates.
How to use it
- Divide what you know into:
- Things you know something about. These are likely to be trends, representing continuity and momentum.
- Elements considered to be uncertain or unknowable. These require you to speculate and to create alternative scenarios.
- Create scenarios by bringing your areas of knowledge and uncertainty together. One way to present your scenarios is to write them as though you are in the future, looking backwards at what has happened.
When you are creating your scenarios, you should bear in mind:
- There is no single method for creating scenarios. Therefore, the techniques used by different people may be inconsistent, unclear and ‘woolly’.
- There is no single method for converting scenarios into decisions.
- Scenario design is subjective rather than objective.
- There is frequently weak integration between scenario planning and other planning mechanisms.
- There is a tendency among users to want to choose only one scenario and to try to predict the future, rather than entertaining multiple futures.
- There is a tendency for users to see their chosen scenario as fixed. However, users need to be flexible, able and willing to adapt to updated information and changing circumstances.
Strengths
- Scenario planning can provide an alternative to trend-based approaches, which assume that the trends of the past will extend unchanged into the future. The creation of multiple futures that can help organisations to prepare for different situations. In this way, scenario planning may be a useful tool to help manage risk.
Weaknesses
- There is little documented evidence of the effectiveness of scenario planning.
- Because you are dealing with unknowns, it is hard to determine how valid the scenarios that you create are.
Similar to
Additional information
- Improvement Service. (nd) Scenario Planning Toolkit. Available at: https://www.improvementservice.org.uk/about-us/covid-19-support-for-councils/scenario-planning-toolkit (Accessed: 30 July 2024).