Scenario Planning
Scenario Planning builds a handful of different, plausible futures around your biggest uncertainties, so you test today's strategy against tomorrows you can't predict instead of betting on one guess.
Two lines cross to form a grid, and your biggest uncertainties become the axes that define four futures.
Reach for this when…
- You're setting a five to ten year strategy and the environment is genuinely uncertain, not just unclear.
- Everyone in the room is quietly assuming the same future, and it might be wrong.
- A single forecast keeps getting invalidated by events.
How to run it
- Define the focal question and the time horizon.
- List the driving forces: political, economic, social, technological, environmental, legal.
- Rank forces by importance and uncertainty.
- Take the two most important, most uncertain forces as the axes of a 2x2.
- Name and build out four scenarios in the quadrants.
- Test your current strategy against each: where does it hold, where does it break.
- Set early warning indicators that tell you which scenario is emerging.
A worked example
Situation. Julien Moreau ran Moreau Cereales, a grain trading business near Lyon, France, and had built a five-year plan assuming EU subsidies and weather would stay roughly as they'd been.
Applied. He and his team picked subsidy policy and climate volatility as the two most uncertain, most important forces, and built four named scenarios from Steady Support and Stable Climate through to Subsidy Cuts and Volatile Climate.
Result. His expansion plan only survived intact in one of the four scenarios. He kept the plan but added a storage investment that held up in all four, and started tracking EU policy announcements as an early warning signal.
The catch
The matrix format tempts people to treat the two chosen axes as the only uncertainties that matter, when a dozen others were ranked out to get there. Scenarios are also easy to build and then file away - the value is in reviewing your strategy against them regularly, not in the workshop artefact.
If none of your four scenarios feel uncomfortable to read out loud, you haven't gone far enough from the present.
Origin: Pierre Wack / Royal Dutch Shell (popularised); Herman Kahn (originated)
This tool also appears in the Strategy Catalog (WESC): Scenario Planning