As kahneman and tversky put it a scenario is

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.”