Scenario planning
Last updated October 6, 2023
What is scenario planning?
Scenario planning is a strategic foresight and decision-making tool used by organizations to anticipate and prepare for potential future developments and uncertainties. It involves creating a set of plausible and well-defined scenarios that describe different future situations or environments. These scenarios help organizations explore various possible outcomes and develop strategies to adapt and thrive in different circumstances.
Why is scenario planning important?
Scenario planning helps organizations navigate uncertainty by considering multiple potential futures. It aids in identifying risks, opportunities, and challenges that might arise. It also encourages proactive thinking and strategic flexibility.
FAQ
Forecasting aims to predict a single future outcome based on historical data and trends. Scenario planning, on the other hand, explores multiple potential futures by considering different combinations of uncertainties and their impacts.
While there’s no fixed number, creating 3 to 4 scenarios is common. This provides a diverse range of futures to consider without overwhelming the planning process.
No, scenarios are not predictions. They are narratives that describe plausible futures based on different assumptions. They help organizations prepare for a range of possibilities rather than predicting a single outcome.