Scenario planning sits alongside a number of other tools that can be useful in the strategic management process.
Other guides that can usefully use this technique include risk management (the scenarios being used to identify possible risks), portfolio management (the scenarios being used to shape your portfolio) and change management. Scenario planning can also be used to complement other approaches such as contingency planning and sensitivity analysis.
Ten tips for successful scenarios
- Stay focused
- Keep it simple
- Keep it interactive
- Plan to plan and allow enough time
- Don’t settle for a simple high, medium and low
- Avoid probabilities or ‘most likely’ plots
- Avoid drafting too many scenarios
- Invent catchy names for the scenarios
- Make the decision makers own the scenarios
- Budget sufficient resources for communicating the scenarios.
(from ‘Plotting your Scenarios’, Ogilvy and Schwartz)
Traps to avoid: some do’s and don’ts
- Do make the scenarios global enough in scope
- Do ensure you focus the scenarios in areas of potential impact on the enterprise
- Do treat scenarios as an informational or instructional tool rather than for participative learning and/or direct strategy formation
- Do ensure adequate process for engaging management teams in the scenario planning process
- Do use experienced, or at least well-briefed, facilitator(s)
- Don’t treat scenarios as forecasts
- Don’t construct scenarios based on too simplistic a difference – such as optimistic and pessimistic
- Don’t stint on the imaginative stimulus in the scenario design.
(from 12manage: e-learning community on management)