5/18/19, 11(45 AM Scenario Planning and Strategic Forecasting Page 1 of 10 122,612 views | Jan 8, 2015, 02:40pm Scenario Planning and Strategic Forecasting Washington Stratfor Contributor By Jay Ogilvy Strategic foresight can be gained through more than one lens. Beyond the microscope of simple budgeting and the macroscope of geopolitics lie still other tools for probing the future. As I settle into the role of contributor to this space, I want to explore multiple futures and multiple perspectives. Since my approach to looking ahead differs from what some Stratfor readers may be familiar with, I want to start by explaining one of my favorite methodologies, which is distinct from — but interestingly related to — geopolitical forecasting. My specialty is multiple scenarios, or scenario planning, as it is best known. Scenarios are alternate futures in which today's decisions may play out. They are stories with beginnings, middles and ends. Good scenarios have twists and turns that show how the environment might change over time. Good Scenarios A good set of scenarios will contain two to five different narratives. More than five scenarios tend to get confused with one another. Three scenarios run the danger that people will try to pick the most moderate or most apparently plausible and forget about the other two. Four is a good number — neither too many nor too few.
5/18/19, 11(45 AM Scenario Planning and Strategic Forecasting Page 2 of 10 Each scenario should contain enough detail to assess the likelihood of success or failure of different strategic options. Will there be sufficient demand for a new product? Are supply chains likely to remain intact? How much competition can we anticipate? Have new technologies rendered a product obsolete? Will political instability put those oil fields beyond our reach? A good set of scenarios should always be customized to a particular context. The scenarios that Royal Dutch/Shell used to anticipate the drop in oil prices in 1986 were far different from the scenarios a major computer manufacturer used to navigate its transition from products to services. The scenarios Xerox used to anticipate the convergence of the copier and printer were far different from the scenarios American Express used to deal with the replacement of traveler's checks by credit cards. Each organization needs its own scenarios to face its own challenges. Purpose is also important. Sometimes the point of a scenario is to pry attention away from the ordinary. The very process of thinking about a range of possible futures can be a useful opportunity for addressing issues that might otherwise be neglected. Think about the rising power of China and India or the creeping onset of climate change .
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- Forecasting, scenario planning, strategic forecasting