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After reading you will understand the basics of this powerful management and strategy tool, including a practical example. Introduction People are confronted with various events on a daily basis. These events include predictable as well as unpredictable matters. Organizations have to contend with these events too.
Some events may dramatically affect the short-term as well as the long-term day-to-day management of an organization. Therefore it is a good thing that organizations are somewhat prepared for future events. What is Scenario Planning?
Scenario planning focuses on an outlook for the future. It is a method with which organizations can form an idea of possible future scenarios and how these may affect their strategic objectives. However, making predictions about the future is very difficult and this is why organizations create a variety of possible future scenarios.
This is exactly what Scenario Planning focuses on. It enables organizations to develop their strategies, products and services and adapt these where necessary in an ever changing world.
Scenario Planning is about making different scenarios for different future landscapes. Using these scenarios, an organization will be able to make better decisions when problems or changes occur. An organization knows what it needs to be aware of and which decisions will work to its advantage.
Causes There are different causes underlying unpredictable future changes. There are many factors that cause an organization to change its strategic plans and direction. Organizations are surrounded by a complex and dynamic market with many external environmental changes.
Organizations do not control these factors, but they can take them into account. In principle, internal developments do not affect the scenarios and therefore they are not factored in.
Structural Scenario Planning is not about making accurate forecasts. It is about exploring what could happen in the future. This gives organizations time to think about how they can be successful in different scenarios.
Scenario Planning obliges organizations to consider their future in an effective and structured manner. Scenario Planning is increasingly used by small and medium-sized companies that are engaged in vision development, strategic management and important decision making.
Added value Multiple future scenarios are used. Each scenario gives a rich description for possible future developments and their consequences for the organization.
Directors need to consider the possibilities, opportunities, risks and threats in each of the scenarios. What are the factors that need to be taken into consideration?
It is the only way an organization can be better prepared for unforeseen circumstances and changes in society and therefore it will not be faced with surprises further down the line. This is the added value of Scenario Planning.
Scenario Planning in 8 steps For a structured Scenario Planning, organizations would do well to consider the 8 step plan.
Future-Proofing Your Strategy: An Example of Scenario Planning in Action By: Yulia Barnakova:: Published: June 19, It’s impossible to know for certain what the future holds. Scenario Planning Example - Venn Diagram. Sometimes Venn diagrams can be very useful in making scenario plan. Click the picture and enter into the download page to save the template. Scenario Planning Example - Six Topics. A nice template available to download and use for your scenario plan. The concept describes what business scenarios are and how to build a step-by-step process when developing a strategic plan. You will also learn what factors are critical for the success of scenario planning and the advantages and .
In the preparatory phase the focus is on themes and their corresponding time frames. The analysis phase involves the following steps: Step 1 — brainstorm visions of the future.
Step 2 — investigate trends use a trend watcher if necessary. Step 3 — choose driving forces. In the second phase the scenarios are developed which produces the following three steps: Step 4 — make a scenario template.
Step 5 — develop the scenarios. Step 6 — present the scenarios. The last phase concerns reflection and this produces the last two steps: Step 7 — evaluation of the scenarios. Step 8 — formulation of policy recommendations based on the different scenarios.
Practical example For a commercial business that exports flower bulbs all over the world, it is important to have a look at what could happen within the next five years.Scenario planning has been used in business, notably by Royal Dutch Shell, to position the company strategically to take advantage of future opportunities and prepare for any potential problems.
Scenario planning (sometimes called “scenario and contingency planning”) is a structured way for organisations to think about the future.
A group of executives sets out to develop a small. For an excellent example of strategic planning at work, consider the following case study. Cisco and Monitor Global Business Network set out to develop scenarios that answered important questions about the future of the Internet.
The following example may be relevant to your organization. Although. A rehearsal is not about the scenario. As a continuity planner you probably know this already. for example, you have 20 delegates who are relatively new to the company rehearing a well established plan that covers a call centre that’s on a flood plain?
BCI british standards BS business continuity business continuity awareness.
Among the many tools a manager can use for strategic planning, scenario planning stands out for its ability to capture a whole range of possibilities in rich detail. By identifying basic trends and uncertainties, a manager can construct a series of scenarios that will help to compensate for the usual errors in decision making — overconfidence and tunnel vision.
Here is an example of an unexpected business crisis that affected a number of businesses in different ways; if those businesses had practiced some scenario planning - the impact on their business would likely have been minimized.