Due to rapid and unpredictable changes to the economic and political environments, traditional long-term planning methods have become less effective in recent years. For this reason, scenario planning, whereby various future scenarios are predicted and planned for, has become a popular approach. The ideal outcome of this process is that a strategy is decided upon that can best stand up against any possible future scenarios.
A series of detailed and diverse potential futures are modelled and strategies are modified to accommodate the most likely scenarios. It is important in modelling these scenarios that a wide range of possibilities are considered, in order for all bases to be covered as the future unfolds. This tool is generally utilised by organisations that rely on long-term forecasts, it is a key tool used for government policy for instance.
The Scenario Planning Process generally consists of 5 stages and is carried out based on past and predicted future trends. Peter Schwartz has written one of the most famous pieces of literature on this topic, titled ‘The Art of the Long View’ where he describes Schwartz’s 8 Step Process for planning for the future.
The art is to decide upon a strategy that can remain resilient regardless of future events, rather than predicting a future event and aligning your strategy with it. The most successful strategies are aware of the possibility of a wide range of events, although account for which is most likely to occur.
Schwartz, P. (1991). The art of the long view. New York: Doubleday/Currency.