TPK Services

Scenario Planning

Scenario planning is an overarching approach to the traditional process of Strategic Planning.

In the past, strategic planning could be undertaken on the premise that things would continue more or less as before and therefore, the most important asset in establishing strategic directions was experience. However, in a world infused with change, experience is only of value to the extent that the future will resemble the past.

Any tool that can help managers to make sensible decisions in today’s volatile business environment and to plot a course to a more certain future in the midst of confusion and uncertainty, must be valuable. Scenario Planning is such a tool.
Scenarios are “stories” which describe different, though equally plausible futures based on a study of the internal and external business environment and the unfolding factors that will dictate future trends and directions. By identifying warning signs as they emerge, companies can avoid surprises, adapt to change and proactively target new business growth opportunities.

The whole process is very much decision driven. To begin, it is essential to clarify and agree on the strategic areas to focus on. Study of macro and micro-environmental forces affecting decisions is undertaken to understand what is happening in the external and internal business environments.

Key benefits that result from scenario planning include:

• Anticipating and leveraging change;
• Stimulating ‘out of the box’ thinking ;
• Reducing future risk;
• Translating strategy into action; and
• Developing a consistent framework.

Some of the decisions we make today will make sense across all future scenarios, these we implement straight away with confidence that we’re making better, more robust plans.

Other decisions will make sense only in specific scenarios. With these we need to monitor for the “early warning signs” that indicate that those scenarios are beginning to unfold. It is important to have acutely sensitised “antennae”, monitoring these critical signs closely.