Scenario Planning

Strategic Planning
Concept
Todays Agenda:

Perspectives - Goal and Interest Based Planning

Scenario Planning
History, Concept, Phases Kishwar Sameen Gulzar
Examples MPhil.
 Concept - What is Strategic Planning?

Strategic planning is an activity that is

used to set priorities, focus energy
and resources, strengthen
operations, ensure that employees
and other stakeholders are working
towards common goals, establish
agreement around intended
outcomes and adjust the
organization's direction in response to
a changing environment.
Concept - What is Strategic Planning?

Realized
Unrealized

Emergent

We are like sailors who must rebuild their ship on the open sea, never able to dismantle it in
dry-dock and to reconstruct it out of the best materials.

- Otto Nuerath
 Perspectives - Strategic Planning
Perspective 1
Goal Based
Goal based planning is probably the most
common and starts with focus on the
organization's vision and goals.
Strategies are made to achieve that
vision.
Goals or vision based planning works
from the future to the present. Planners
pick some time into the future and then
suggest specific goals to be achieved by
that time. It is usually based on a rather
long-range plan, at least 5 years into the
future.
Perspective 2
Issue Based
Issue based strategic planning often
starts by examining issues facing the
organization. Strategies are made to
address and resolve those issues in a
comprehensive manner.
Issue based planning starts from the
present and works to the future. Planners
identify major issues facing the
organization right now. Issue based
planning usually produces a plan with a
short time range, especially targeting a
crisis or conflict situation.
Goal / Vision Based Planning
Issue Based Planning
 Scenario Planning - History
1940s
WW II - Scenarios used in military planning by the U.S. Air Force.
1960s
Herman Kahn develops comprehensive scenarios concerning governmental
and military issues.
1970s
SHELL implements scenario planning in their organisation just in time to
prepare for the emerging oil crisis.
1980s
Scenarios gain acceptance in the corporate sector e.g. Hydro, Aker, DnV, IBM.
1990s
Increasing interest in scenario learning/planning. Several comprehensive
books on the topic are relased.
 Scenario Planning - Concept
Scenario planning, also called scenario thinking or scenario analysis, is a strategic
planning method that some organizations use to make flexible long-term plans.

Thinking the Unthinkable.

Goals of scenario planning is to;

Envision alternate extreme futures.
Create a strategy that works for all extreme futures.

Science fiction writers have been very effective in exploring future utopias and
dystopias.
Moon landings, submarines, internet and touch screens etc.
Totalitarianism, psychological conditioning and artificial intelligence etc.
Scenario Planning - Concept
Scenario Planning - Phases
 Scenario Planning - Phases
Special focus on first three steps

Scoping
What problem are you trying to solve?
Gather information

Trend analysis
Identify driving forces
PEST analysis

Building Scenarios
Two dimensional grid
Multidimensional grid
 Scenario Planning - Scoping
Project Specific Scenarios
What's the best way to beat a rival?
How to clean a polluted river?

Crisis scenarios
How can local, independent bookstores survive in the face of Amazon.com?
How can the entertainment industry fight cultural onslaught?

Exploration/Consensus Building Scenarios

What are the possible futures for Colombia as a nation?
How can we build democratic institutions in Pakistan?
How can American elections become free of financial influence?
Scenario Planning - Scoping
 Scenario Planning Trend Analysis
A -Time Periods
Near Term Future
Up to one year from now
Short Term Future
One - five years from now
Mid-Term Future
Five to twenty years from now
Long Range Future
Twenty to fifty years from now
Far Future
Fifty plus years from now
B - Attitudes
Providential / Fatalistic
what will be will be
Conventional
tomorrow will be much like today
Pessimism
decline from past Golden Age
Discontinuity
the future will be nothing like the present
Optimism
faith in progress / technology cures all
Unknowable
futile to attempt to go beyond the present
Futurist
the future is rich with possibility resulting
from human planning and action
 Scenario Planning Trend Analysis
C - Dimensions Leading Examples

Physical Environment CIA Futures

Socio-Cultural Shell
Legal, Moral and Ethical
Political
Economic
Military, Defense and Security
Science and Technology
The Commercial World
 Scenario Planning Building Scenarios
Identify two highly important but highly uncertain drivers
Envision the extreme conditions for each driver
Extreme positive vs. extreme negative,
Extremely optimistic vs. extremely pessimistic
Draw four quadrant plot, with the extremes on the axes
 Scenario Planning Building Scenarios
CIA Futures

Inclusive Globalisation
A virtuous circle develops, enabling a majority of the Worlds people to benefit from globalisation.
Conflict is minimal within and among states benefiting from globalisation.
Pernicious Globalisation
Global elites thrive, but the majority of the worlds population fails to benefit from globalisation.
Internal conflicts increase, fuelled by frustrated expectations, inequities, and communal tensions.
Regional Competition
Regional identities sharpen in Europe, Asia, and the Americas, driven by growing political
resistance to US economic hegemony. Military conflict among and within the three major regions
does not materialize, but internal conflicts increase among the countries left behind
Post-Polar World
US economy stagnates. Economic and political tensions with Europe grow, and US-European
alliance deteriorates. Instability in Latin America and Asia force those regions to also turn inward.
Given the priorities of Asia, the Americas and Europe, countries outside those regions are
marginalized, with virtually no sources of political or financial support.
Scenario Planning Building Scenarios