Understanding Scenario Thinking: Global Strategy and Local Execution

Nowadays, decision-making and business development has become far more complex than ever before, taking place in a fast changing, highly uncertain knowledge-driven environment where values, behaviors, and social structures are no longer as stable and predictable as they were.

Scenario Thinking is a powerful methodology to enable executives to anticipate change and incorporate uncertainty into the decision making process – with cross-cultural and geo-political acumen, so relevant in the today’s “glo-cal” world.
Scenario Thinking is a structured process of thinking about and anticipating the unknown future, without pretense of being able to predict the future or being able to influence the environment in a major way. Instead, it navigates through the uncertainties and large-scale driving forces that are impacting on the future. The objective is to examine possible future developments that could impact on individuals, organizations or societies, in order to find directions for decisions that would be most beneficial no matter how the future unfolds.
Scenario Thinking, introduced by Shell Group Planning in the 1970s, has evolved as a powerful methodology to enable groups to structurally anticipate change and incorporate external uncertainty into the internal decision making process. Successfully used by many organizations and governments, Scenario Thinking has proven its worth in the past thirty years. Accountable decision making requires a high element of certainty – an adequate level of knowledge and confidence in our assumptions about that knowledge. Thus the ability for an organization to critically review its assumptions on external developments and to incorporate thinking about external uncertainties in a structured way is of key importance.

Scenario thinking is a tool for motivating people to challenge the status quo, or get better at doing so, by asking “What if?”. What if we are about to experience a revolutionary change that will bring new challenges? What if we experience a renaissance of innovation? And, importantly, what if the future brings new and unforeseen opportunities or challenges for your organization? Will you be ready to act?

The 3 principles of Scenario Stinking are long view, multiple perspectives, outside-in thinking.
The Scenario Thinking process begins by identifying forces of change in the world, such as new technologies or the shifting role of government, that may have an impact. These forces are combined in different ways to create a set of diverse stories about how the future could unfold. Once these futures have been created, the next step is to try to imagine what it would be like for an organization or community to live in each of these futures. The exercise may sound simple—and in many cases it is. But the results are often surprising and profound. In the process of adding detail and color to each future, new issues or strategic concerns rise to the surface, and old issues get reframed.
Scenarios are stories about how the future might unfold for our organizations, our issues, our nations, and even our world. Scenarios are not predictions. Rather, they are provocative and plausible stories (or hypothesis) about diverse ways in which relevant issues outside our organizations might evolve, such as the future political environment, social attitudes, regulation, and the strength of the economy. Because scenarios are hypothesis, not predictions, they are created and used in sets of multiple stories, usually three or four, that capture a range of future possibilities, good and bad, expected and surprising. And, finally, scenarios are designed to stretch our thinking about the opportunities and threats that the future might hold, and to weigh those opportunities and threats carefully when making both short-term and long-term strategic decisions.

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