Yet this optimal scenario would also still result in an 8fold higher peak demand on critical care beds over available capacity. He began by stating the assumption that in principle people really do treat scenarios as though they were forecasts or projections, and he asked how much detail is really needed and whether people would use it if they had it. Scenario planning and strategic forecasting forbes. Further, the engagement of various stakeholders is crucial for the pertinence of the. How to use scenario analysis to manage in uncertain times. As much as we want to believe that trends will inform us and help us make better decisions, the only way to really improve decisionmaking is to embrace scenario planning. Although it is surprisingly hard to create good ones, they help you ask the right questions and prepare for the unexpected. The four groups share their debriefs and the whole group makes firststeps decisions about their now what. The driving forces and critical uncertainties identified below are highly summarized, and would be presented and aggregated very differently in a real scenario project. Our experience over the past six years shows how critical success factors and future scenarios can significantly improve the depth of thinking and analysis in strategic planning efforts. Scenario planning is an integral part of the strategic planning process. Oct 22, 2018 this happens because the uncertainties driving the matrix act not only as proxies for other critical uncertainties identified during a scenario project but as proxies for ideas outside of the domain of exploration. This document describes a robust 9phase process for proper scenario planning analysis and shows how to integrate it into a scenario planning workshop environment. Also referred to as scenario mapping, scenario development or scenario analysis, the process typically involves identify external trends and disruptive innovations, exploring how the future could unfold, what the consequences would be for the business, and how to respond with alternative strategic plans.
Scenario planning to address critical uncertainties for robust and resilient waterwastewater infrastructures under conditions of water scarcity and rapid development. Using critical uncertainties to quickly respond to. Liberating structures are a collection of interaction patterns that allow you to unleash and involve everyone in a group. Reno, nv prweb january 12, 2009 with business owners and nonprofit directors alike feeling a sense of uncertainty about the extent of the current economic crisis, veteran strategic planning facilitator, erica olsen is advising her clients and others to develop scenarios in advance for the situations they are most likely to face in the looming economic uncertainty. Scenario logic abc xyz issue issue high low abc xyz high low scenario a scenario b scenario c scenario d 1. The role of scenario planning in a world of uncertainties. Scenario matrix is arrived at by assuming that the 2 critical uncertainties chosen may develop in one direction, or its exact opposite. By identifying basic trends and uncertainties, a manager can construct a series of scenarios that will help to compensate for. Stretch them to their extremes mutually exclusiveness. Its practical value is that, by helping you foresee different ways your. This exploration results in a broader, more innovative view about future growth opportunities and risks. Shell, the pioneer in scenario planning, described these as predetermined. Try critical uncertainties with a development team to define strategies on how to build the product. Combine as many of the uncertainties as possible into the two most impactful transformational themes lets call them a and b.
Use critical uncertainties with the scrum masters in the organization to create transparency about the scenarios they might face while trying to change to the organization in order to be successful with scrum. Studying the future starts by accepting its uncertainties and convert them into. Always work with someone highly experienced in the field most consultants that claim to do scenario planning are making it up. If there are three critical uncertainties the scenario space has three dimensions such as green culture, green innovation and the economy, as shown below, which were derived for the european agency for safety and health at work, when looking at scenarios for new and emerging risks for health and safety in green jobs. For caseconsult one critical uncertainty is whether or not the property market will pick up again within the next 12 months. Strategic planning in a rapidly changing business environment. Practice scenario planning to develop a strategy in a world of uncertainties by dr.
If there are three critical uncertainties the scenario space has three dimensions such as green culture, green innovation and the economy, as shown below, which were derived for the european agency for safety and health at work, when looking at scenarios for. This is where the liberating structure critical uncertainties proves its value. There are however other scenarios where some form of lesser ai would be of use. Sophisticated databases, improved software to manage relational. Scenario planning involves several elements or components that together yield a composite, multifaceted view of the future.
Develop strategies to quickly respond to future challenges with. A critical uncertainty is an uncertainty thats key to the decision you focused on from step 1. With the help of the proper process, the team will be able to achieve a particular balance, which is essential between wild creativity and just imagination. The ease of the cloud can help you get the buyin from your boss for planning software. This report explores the value of enhancing typical strategic planning techniques with the critical success factor csf method and scenario based planning and presents an integrated framework for strategic planning.
Identify your critical uncertainties after youve make a list of your key business drivers, you should pick critical uncertainties that will have the most profound impact on your organization. Pdf scenario planning to address critical uncertainties for. Howard olsen we at onstrategy, like many businesses across the country, had our eye on the august 2nd deadline to raise the national debt ceiling. Scenario planning free download as powerpoint presentation. This could be complexity related to software development, product development or. Critical uncertainties here is the next thing that the scenario team needs to put more emphasis on. Scenario planning is a creative, very practical technique to foresee and better. Use ecocycle planning as input for critical uncertainties. This could be complexity related to software development, product. Learning from the future through scenario planning michael j blyth four scenes pty ltd march 2005 decisions made today are usually for an uncertain future.
For the unpredictable remainder, the critical uncertainties, scenarios will capture the alternatives in coherent bundles. Scenario planning turning critical uncertainties into strategies for the future by karl rose, senior fellow, scenarios, world energy council t he desire to know the future is as old as mankind itself, one only has to look at ancient greece and the stories around the oracle of delphi to be reminded of this. Importantly, the point of scenario planning is not to predict. Historically, scenario analysis arose out of military planning during world war ii. Scenario sets do not arrive with a best before or expiration date. See figure a for an overview of the process and the relationship among components. Pdf training manual for scenario planning researchgate. Key to agility and anticipation are your plans flexible enough to manage through the next ten years of disruption. Among the many tools a manager can use for strategic planning, scenario.
Scenario planning a tool for navigating strategic risk. Scenarios are a powerful tool in the strategists armory. How to build scenarios we look out into the future, trying our best to make wise decisions, only to find ourselves staring into the teeth of ferocious and widespread uncertainties. The onedimensional planning approach top is appropriate when the scope is welldefined and the range of future uncertainty is limited. Rate critical uncertainties according to two factors. The scenario planning approach bottom allows progress along a path of. After trend analysis, we needed to identify the critical uncertainties step four. By following a methodical, stepbystep process, the scenario team can achieve a balance between the kind of. Critical uncertainties are unstable or unpredictable, such as consumer tastes. There has been extensive discussion of the forces shaping the future of work, but i dont believe there has been sufficient critical analysis of the uncertainties.
Scenario planning scenario planning strategic management. Nov 19, 2018 for any structured analysis of the future, we need to understand on the one hand trends and driving forces, and on the other critical uncertainties. In software, the difference between freeware and freeopen source software foss is whether you can get access to the underlying instruction code for the application, which would then allow you go in and make modifications. Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible longterm plans. This is what a world of open source scenario planning might look like. His professional practice is the assurance of safety, software and cybersecurity, and he writes. Prediction markets integrate diffused knowledge using a market mechanism to derive a predicted likelihood, essentially market prices are assigned to various outcomes and are treated as analogs of their likelihood. Scenario planning a powerful foresight technique udemy. Scenario planning aims to define your critical uncertainties and develop plausible scenarios in order to discuss the impacts and the. Providing insight for impact scenario planning is a management tool that is designed to allow organizations to evaluate the efficacy of strategies, tactics, and plans under a range of possible future environments. Although scenario planning approach is widely applied in different fields of. Scenario planning is a process for businesses to think about and plan for the future. Discuss resulting scenarios and give them telling names. Once you have identified your scenarios, and the critical uncertainties that will.
Driving forces, uncertainties, and four scenarios to 2025. Dont complicate scenarios by selecting too many drivers. Scenario planning is thus about exploring alternative futures that can realistically emerge. Critical uncertainties make planning for the future a little bit easier. Predetermined elements are relatively stable or predictable, like demographic shifts. The most critical and uncertain factors of the ecocycle are used for defining the scenarios and strategies. Future studies, foresight and scenarios as basis for better strategic. Jan 12, 2009 reno, nv prweb january 12, 2009 with business owners and nonprofit directors alike feeling a sense of uncertainty about the extent of the current economic crisis, veteran strategic planning facilitator, erica olsen is advising her clients and others to develop scenarios in advance for the situations they are most likely to face in the looming economic uncertainty. The role of scenario planning in a world of uncertainties strategy. Analyses the relationships between the critical uncertainties and. Develop strategies for operating in a range of plausible yet unpredictable futures 100 min. Scenario planning challenges management to revisit its assumptions about its industry and consider a wider range of possibilities about where its industry may head in the future. This happens because the uncertainties driving the matrix act not only as proxies for other critical uncertainties identified during a scenario project but as proxies for ideas outside of the domain of exploration.
Demography is one of the most reliable sources of predetermined elements. An interesting post by mike thicke over at cloud chamber on the potential use of prediction markets to predict the location of mh370. Strategic planning with critical success factors and future. Critical uncertainties making decisions about technology in an uncertain world.
This report explores the value of enhancing typical strategic planning techniques with the critical success factor csf method and scenariobased planning and presents an integrated framework for strategic planning. They are called critical uncertainties and they become a key component of a scenario planning exercise. Using critical uncertainties to quickly respond to future. Discover what, why, and how with scenario planning.
Instead of offering multiple scenarios as options, only one scenario is. If it does, the demand for the companys products and services is likely to increase. The balance of strategies can succeed only in one scenario. What is scenario planning and how to use it sme strategy. Develop strategies to quickly respond to future challenges.
Figure a scenario planning components critical uncertainties driving forces scenarios key focal issue implications and options narratives. We cannot plan the outcomes of each scenario, but we use accurate scenario simulations. For any structured analysis of the future, we need to understand on the one hand trends and driving forces, and on the other critical uncertainties. In short, it is a perfect tool for todays increasingly uncertain and volatile world. Pierre wack sums up the outcome that scenarios seek to change our mental maps. Economic downturn underscores importance of scenario planning. Imagination also comes into play as managers use scenario analysis to determine or invent possible courses of action to take so the organization can reduce its overall risk and maximize its value. A tool for strategic thinking 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.
The outcome of the scenario planning process is a portfolio of future. These critical uncertainties are also used to further design a new breed of indicators. Foresight, scenariobuilding, scenarioplanning, future studies. Sep 29, 2014 the creation of the matrix is the most intellectually challenging analysis that takes place during a scenario planning project, and also the intuitive. The product of scenario planning is a set of stories describing a range of futures focused on the strategic issues facing a company. In the strategic planning world, scenario planning is a way of simplifying a complex future by providing the opportunity to ask the whatif questions and to rehearse how you may respond should a certain event or trend happen in the future. Granger morgan spoke on the role of driving forces in scenarios. Sometimes phrasing these uncertainties as questions can help you clarify them. Presentation material we use to introduce critical uncertainties. The uncertainties are represented as axes of a matrix, which then defines 4 quadrants, or scenarios, each one a unique combination of how the 2 uncertainties may turn out. This process requires investments of people, time, and money.
How to use scenario planning in your business experthub. There has been extensive discussion of the forces shaping the future of work, but i dont believe there has. Choose the target issue, scope and time frame that the scenario will explore. For organizations, scenario planning provides an invaluable opportunity to have a strategic discussion around key drivers and critical uncertainties in your operating environment. Scenario planning turning critical uncertainties into. When brainstorming uncertainties, recall predictionsgonewrong and events that caught the group off guard. Strategic planning, csfs, and scenario planning all require expertise in the particular method. Identify two most critical uncertainties from the top right corner 2. Because of this dual nature, it is also the most difficult to teach because the process uses and combination of implicit and tacit knowledge. They are particularly useful in developing strategies to navigate the kinds of extreme. The future is unknowable, yet we choose to devote a lot of resources and effort to discussing and studying possibilities before we make decisions about new directions or new investments. The most significant trends likely to affect the larger world are those forces that are the big what ifs the driving. Each small group debriefs with what, so what, now what.
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