Scenario Planning

What is Scenario Planning?
DecisionPath's ForeTell methodology derives from scenario planning, a technique developed by the
U.S. military and later refined by oil industry strategists to prepare for decisions in highly uncertain
and risk-intensive environments. (See, for example, The Art of the Long View: Planning for the
Future in an Uncertain World, by Peter Schwartz).

Scenario planning provides a systematic approach to thinking about the forces, events, and actors likely to shape a particular industry, society, or geo-political landscape. These exercises produce a small number of vivid scenarios that depict plausible possible futures. Decision makers then use these results as baselines or targets for developing strategies to either influence or respond to those scenarios to their organizations' advantage.

For example, oil companies use scenario planning to anticipate future energy needs, price structures, and sociopolitical environments. They then plan long-term investments in energy assets, production technologies, and business models in order to increase their likelihood of continued growth. One famous success story is that scenario planners at Royal Dutch Shell anticipated the emergence a Middle-East oil cartel, and positioned the company well for the upheavals caused by OPEC. Similarly, military strategists use scenario planning to help envisage future threats and alliances, and then plan force structures, weapons and logistics systems capable of responding to those threats.

Scenario Planning has limitations.
The value of scenario planning is widely recognized. However, the method is not applied as widely as it merits, because of the considerable effort and skill it demands.

Developing effective scenarios requires considerable knowledge, discipline, and artful construction to focus on the issues of direct relevance while maintaining receptivity to the unexpected. Organizations typically only develop three to five scenarios because they are so difficult to develop. Similarly, they update and revisit them every five years or so because the process is so intense.

In addition, playing out the effects of particular decisions in alternate scenarios presupposes a deep understanding of environmental forces and stakeholder behaviors. Knowledge of situational dynamics is typically dispersed across many people and data sources. Assembling and applying this knowledge is a daunting task. Performing this exercise in a detailed, consistent and repeatable manner, with adequate documentation of the process is a more formidable challenge still.

Most organizations find it hard to justify the time, investment, and other risks to carry out these important strategic exercises, or perform them only rarely.

ForeTell Automates and Extends Scenario Planning to Overcome These Problems
DecisionPath addresses these adoption problems by extending scenario planning methods with complementary software tools. ForeTell solutions simplify the task of defining scenarios for particular kinds of decisions. A ForeTell solution provides a pre-defined template for creating scenarios quickly and correctly, based on two kinds of expertise - scenario planning and knowledge that focuses on a particular domain and/or type of critical decision. In addition, it takes minimal effort to make as many scenarios as you require. With ForeTell, you simply copy an existing "baseline" scenario and add or delete entities, or change assumptions or decisions.

ForeTell does not create decisions automatically, any more than traditional scenario planning does. However, ForeTell's simulation engine automates and standardizes the task of projecting the likely consequences of candidate decisions in alternate possible futures. And ForeTell's analytics help you compare the outcomes of competing decisions, to identify robust decisions.