Scenario Planning

Prepare for an Unpredictable Future

Senior executives are always looking for insight into the future so they can make better strategic decisions in the present, and they know they face difficult challenges. Among the traps and pitfalls that await them, there is:

•  The danger of groupthink, the tendency for people to agree with others in a peer group without sufficient critical thought.

•  The possibility of tunnel vision, looking too narrowly at the future and missing important elements that happen to lie outside of the tunnel.

•  And the risks associated with relying too much on predictions, which, when they don’t come true, render carefully-prepared plans useless, or worse.

Scenario planning is a systematic planning method that addresses these shortcomings. This approach, pioneered at Royal Dutch Shell, offers a more effective way to think about the future. Instead of attempting one-dimensional predictions that will determine our plans, we use a discovery process to explore key trends and emerging factors, and to understand the risk and reward profiles of possible futures that may emerge. We then make plans to accommodate a wide range of possible future outcomes, and develop strategies that confer the greatest advantage in multiple possible futures.