Effective scenario planning starts with categorizing the various types of disruptive events that might occur. Understanding the cash impact of different decisions is vital to making sure that your plans work out and that you achieve your goals. Scenario planning is a process to support decisionmaking that helps. They are particularly useful in developing strategies to navigate the kinds of extreme events we have recently seen in the world economy. Jun 22, 2015 no detailed methodology to scenario planning is documented in literature. Scenario planning templates scenario planning examples. It is in large part an adaptation and generalization of classic methods used by military intelligence. 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. Also referred to as scenario mapping, scenario development or scenario analysis, the process typically involves identify external trends and disruptive innovations, exploring how the future could unfold, what the consequences would be for the business, and how to respond with alternative strategic plans. It is also referred to as scenario analysis and scenario thinking. It is a method for learning about the future by understanding the nature and impact of the most uncertain and important driving forces affecting our world. Scenario planning allows organizations to explore the world in which they operate.
Overcoming obstacles to effective scenario planning mckinsey. So you might wanna repeat this scenario planning process for several different combinations of scenarios that might yield different insights. It assists them with thinking, in advance, about the many ways the future may unfold and how they can be responsive, resilient, and effective, as the future becomes reality. Figure 3 provides examples of drivers that may be integrated into the development of scenario plans. It is in large part an adaptation and generalization of classic methods used by military intelligence the original method was that a group of analysts would generate simulation games for policy makers. Scenario planning is a strategic planning tool or method for improving decision. By using these free templates, you can create professional scenario plans in just minutes.
Scenario planning is a strategic planning tool or method for improving decision making against a background of possible future environments. Unlike approaches to scenario planning that take a probabilistic stance that is, making predictions in percentage terms or as bestcaseworstcase scenarios3 or a normative stance that is, envisioning what a future should look like, the oxford scenario planning approach is based on plausibility. Importantly, the point of scenario planning is not to predict. A business can then create contingency plans for how to deal with each of these alternative futures. Prioritise the scenarios that are needed to move forward with planning instead of trying to develop all possible scenarios. Scenario planning challenges management to revisit its assumptions about its industry and consider a wider range of possibilities about where its industry may head in the future. In simple terms, a scenario is an internally consistent account of how the. The 1972 club of rome report the limits to growth is one of. And its important to understand that even after youve done all this, you might decide that you want to make the riskier strategic move of moving in a direction that isnt robust across all those scenarios. Scenario planning differs from other planning meth ods, such as contingency planning, sensitivity analysis, and computer simulations. Scenario building, an analysis of how situations might evolve, is an essential. Scenario planning or scenario thinking is a strategic planning tool used to make flexible longterm plans.
The future of learning will pull in dialog about learning, acting like gravity, placing appropriate ideas, concepts and evidence in orbit, while material not related to the question. May 10, 2018 scenario planning is a system for deriving and examining a set of distinctly different futures. Scenario planning example main topic and details model this scenario planning example can be used in many situations. 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. The 1972 club of rome report the limits to growth is one of the most famous and controversial examples of such a study. Scenario planning a process of analyzing possible future events by considering alternative possible outcomes scenarios. While the approach has a long history, it burst into the news in 1973. Scenario planning is a strategic planning method that organizations use to develop flexible longterm plans. Scenario planning example this wonderful scenario planning example presented below is available to download and customize for your own use. However, a broader definition of green infrastructure planning can include restoration of the hydrologic functions of the. Instead of waiting for challenges to confront hospital management, doctors and managers should act in advance to optimize and sustain valuebased health. Pdf scenario planning is a practical tool for collective strategic thinking in organizations, especially. I will provide an overview of scenario analysis and explore the link between scenarios and the storytelling.
Scenario planning is a huge part of business planning. Include just enough detail for every scenario to permit planning and communicate to others the anticipated conditions and needs of the affected. 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. Scenario planning chartered global management accountant. It complements and can replace the introduction to scenario plann. Although you may not be able to use these scenarios in. It anchors the project so that people are clear about what they are solving for. Jul 09, 2012 click on the image to see fullsize pdf. At its core, scenario planning creates multiple, purposefully.
Scenario planning is a system for deriving and examining a set of distinctly different futures. You can also incorporate the results of scenario planning into your strategy formulation and implementation. Free scenario planning examples download edrawsoft. Scenario planning enables professionals, and the public, to respond dynamically to an unknown future. It can be easy and timesaving to use readymade templates when you create scenario planning diagrams. The focal question in scenario planning acts as an anchor and as a fence. Scenario planning is not focused on the organization its. Peter schwartz called planning with scenarios an art, not a science.
Conway swinburne university of technology introduction strategic planning is about developing a plan to implement strategy. How to write a good scenario planning focal question. According to chermack, this is the reason why only few understand the exact application methodologies. You can easily change the number of the list shapes through edraw. Scenario planning comes out of war game analysis from the 1950s and 1960s. Generating insights by creating a small set of scenarios for an organizations future environment that are.
The following example may be relevant to your organization. This exercise demonstrates the essence and value of scenario planning and. Teams are formed, an organization is selected, and a list of strategy questions is prepared and narrowed to each teams overriding big question. This work highlights the importance of scenario planning in hospitals, proposes an elaborated definition of the stakeholders of a hospital and defines the influence factors to which hospitals are exposed to. 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. Oct 18, 2019 the concept of scenario planning belongs to strategic management that deals primarily with the strategies to combat the uncertainties about the future. Teams are formed, an organization is selected, and a list of strategy ques. It is a method with which organizations can form an idea of possible future scenarios and how these may affect their strategic objectives. The purpose of this is to understand different future scenarios of transport and landuse in scotland. This video takes you through 5 simple steps which enable you to develop a. In this course, i will show you how to analyze past data and project into the future. Participants in a scenario planning exercise first conduct research to understand the major forces that might move the world in different directions. Case analysis in business is defined as the decision support and planning tool that projects the likely financial results and other business consequences of an action or investment. The use of scenario planning techniques as described in this paper is widespread in private industry and in the public sector.
In short, it is a perfect tool for todays increasingly uncertain and volatile world. Edit and export scenario planning examples to add to your powerpoint presentations and word docs. Scenario planning, otherwise called scenario thinking or scenario analysis, is a strategic analysis method that was adapted from the military intelligence. Cisco and monitor global business network set out to develop scenarios that answered important questions about the future of the internet. 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 exploration results in a broader, more innovative view about future growth opportunities and risks. Scenario planning focuses on an outlook for the future. 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.
For an excellent example of strategic planning at work, consider the following case study. Scenario planning was previously used for military intelligence, but it is now being used by multiple companies around the world. How scenario planning can help your business float. Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible longterm plans. However, making predictions about the future is very difficult and this is why organizations create a variety of possible future scenarios. Browse the following scenario planning examples that edraw has prepared. Apr 27, 2018 scenario planning is a huge part of business planning.
Scenario planning provides a means for ordering perceptions about how the future may play out and determining what strategic decisions today offer the best. In 1965, a time when quantitative, computerdriven planning was very much in vogue, royal dutch shell started experimenting with a different way of looking into the future. It is used by organizations as a tool to visualize possible future events and conditions that may affect them and take precautionary measures to control the impact. Next ill show you how to manage scenarios in excel using static values, using percentages of base values, and by showing and hiding details as required. Scenario planning is a widely used strategic planning tool. Scenarios are a powerful tool in the strategists armory. In simple terms, a scenario is an internally consistent account of how the business environment, the. Scenario building can quickly turn into a heavy and unwieldy process. It has since been adopted by many of the most profitable and sustainable organizations around the world. The views expressed in this presentation are the views of the authors and do not necessarily reflect the views or policies of the asian development bank, or its board of governors, or the governments they represent.
Scenario planning is a disciplined method for imagining possible futures that companies have applied to a great range of issues. Although it is surprisingly hard to create good ones, they help you ask the right questions and prepare for the unexpected. Scenario planning is a process for businesses to think about and plan for the future. 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. The intent of scenario planning is to build a number of plausible future outcomes that vary from the most commonlyaccepted scenario. Scenario planning framework and success factors ross dawson. Scenario planning is a practical tool for collective strategic thinking in organizations, especially when external uncertainty is high. Scenario planning templates to help you predict and analyze possible future conditions that may affect your organization with your team. Schoemaker is the chairman of decision strategies international, inc. The concept of scenario planning belongs to strategic management that deals primarily with the strategies to combat the uncertainties about the future. Dec 15, 2011 this animated video can be used to help an audience understand what scenario planning is. Its overall purpose is discussed and two complementary. Strategic planning is a well known method for coping with future changes in organizations.
On the flip side, building scenarios for what could happen if you lose a client or get paid late will help you make plans to guard against a cash gap. How to build scenarios in preparation for or during. Pdf among the many tools a manager can use for strategic planning, scenario planning stands out for its ability to capture a whole range of. The discipline best suited for this work is called scenario planning. An innovative approach to strategy development authorpresenter. Scenario planning helps you to prepare for alternative outcomes. Below are summaries of the key points in the overview page. This animated video can be used to help an audience understand what scenario planning is.