As Kahneman and Tversky put it A scenario is especially satisfying when the

As kahneman and tversky put it a scenario is

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As Kahneman and Tversky put it: “A scenario is especially satisfying when the path that leads from the initial to the terminal state is not immediately apparent, so that the introduction of intermediate stages actually raises the subjective probability of the target event.”26 Conjunction fallacies can increase the perceived plausibility of unlikely scenarios, especially if they offer concrete detail and are causally coherent. Conclusion When contemplating the future, it is useful to consider three classes of knowledge: 1. Things we know we know. 2. Things we know we don’t know. 3. Things we don’t know we don’t know. Various biases — overconfidence, under- and over-prediction, the tendency to look for confirming evidence — plague all three, but the greatest havoc is caused by the third.27 Although there are no failproof techniques, focusing attention on two and three can gain much improvement. And this is where scenario planning excels, since it is essentially a study of our collective ignorance. It institutionalizes the hunt for weak signals, such as OPEC’s price hikes in 1973 or Gorbachev’s political ascent in the early 1980s. The scenario method continually pushes the envelope of possibilities since it views strategic planning as collective learning.28 Good scenarios challenge tunnel vision by instilling a deeper appreciation for the myriad factors that shape the future.29 Scenario planning requires intellectual courage to reveal evidence that does not fit our current conceptual maps, especially when it threatens our very existence. Nonetheless, what may initially seem to be bleak scenarios could, in fact, hold the seeds of new business and unrecognized opportunity. But those opportunities can be perceived only if you actively look for them. Pierre Wack once characterized scenario planning at Royal Dutch/Shell as “the gentle art of reperceiving.”30 To him, the test was whether scenario planning would lead to more innovative options. In addition to perceiving richer options, however, we must also have the courage and vision to act on them. As F. Scott Fitzgerald noted, “The test of a first-rate intelligence is the ability to hold two conflicting ideas in mind at the same time, and still retain the ability to function.”
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