Scenario planning typically takes place in a workshop setting, where participants explore current trends, drivers of change and key uncertainties, and how these factors might interact to influence the future schoemaker 1995. It examines the outcomes a company might expect under a variety of operating strategies and economic conditions. This guidebook explains the uses of and processes for conducting scenario planning as both a futuring technique and as a planning tool. Schoemaker is a pioneer in the field of decision sciences, among the first to combine the practical ideas of decision theory, behavioral economics, scenario planning, and risk management into a set of strategic decisionmaking tools for managers. Try to envision different futures through tools like scenario planning and then explore how underlying market shifts may affect your customers. The analysis reports the literature search criteria, followed by a general division of scenario planning scholarship into theoretical conceptual work and datadriven inquiry. Participants in a scenario planning exercise first conduct research to understand the major forces that might move the world in different directions. Trbs national cooperative highway research program nchrp report 750. In fact, as a discipline that has grown more in practice than in any other domain, much about the process is not fully understood.
Scenario planning is a disciplined method for imagining possible futures that companies have applied to a. Scenario planning is a strategic method that has the team map driving forces defined by two axes, creating four quadrants. For more than a decade, futures studies scholars have prefaced scholarly contributions by repeating the claim that there is insufficient theory to support chaotic scenario methodology. Unlike most traditional scenario planning strategy techniques, upboards online scenario planning collaboration tools allow any team or organization to instantly begin working with our web templates and input forms. It proposes an enhanced, integrated information framework for strategic planning that can help organizations understand the broad range of interrelated elements that influence strategy development. When ups starting the scenario planning for horizon 2017, they decided to limit the number of participants from the 1997 scenarios. These four quadrants are then identified by combining the forces into four possible outcomes known as scenarios. Further reproduction prohibited without permission.
Scenario planning is one tool, among others, with great potential to develop these qualities in organizations. The way that ups decided to set their longterm framework was through scenario planning. All content in this area was uploaded by paul schoemaker on nov 02, 2017. Scenarios are stories about the way the world might turn out tomorrow, stories that can help us recognize and adapt to changing aspects of our present environment. Use your scenarios to explain your strategic choices and build support inside your company and well. A catalog of commercially available software for strategic planning janfeb 1992. To close this gap, the paper presents scenarios as a technique to support. How scenario planning influences strategic decisions how.
This video takes you through 5 simple steps which enable you to develop a. After reading it, you will understand the basics of this powerful decision making tool what is a whatif analysis. Schoemaker has coauthored several books, including decision traps and winning decisions. Schoemaker, phd, a worldrenowned authority on decision making and scenariobased strategic management, is chairman and ceo of decision strategies international, inc. The authors begin the task of investigating the elements that appear common to multiple models and processes with intent of. A note on scenario planning 1 background scenario planning is a process that stimulates imaginative, creative thinking to better prepare an organization for the future.
Management tools scenario and contingency planning. By identifying basic trends and uncertainties, a manager can construct a series of scenarios that will help to compensate for the usual errors in decision making overconfidence and tunnel vision. A structured method for identifying and visualizing scenarios. It synthesizes documented theory and research in strategic planning, csfs, and future scenarios. Scenario planning scenario planning extraversion and. An analysis and categorization of scenario planning. Contingency planning assesses what effect sudden market changes or business disruptions might have on.
Chapter 2 offers an overview of the process through the examples of a small german travel agency that used scenarioplanning insights to become a major travel software firm. This article presents an analysis and categorization of scenario planning scholarship over the last 20 years. Schoemaker, phd, is research director of whartons emerging technologies management research program. Speci cally, scenario planning acknowledges that no single scenario can provide an adequate description of the future. In particular, organisations that face the following conditions will benefit from scenario planning schoemaker, 1995, p27. Scenario planning for freight transportation infrastructure investment analyzes the driving forces behind highimpact economic and social changes as well as sourcing patterns that may affect the u.
Changing organizational culture with scenario planning. By identifying basic trends and uncertainties, a manager. By paul schoemaker, senior fellow and former research. This volume introduces and describes the use of scenario planning in libraries. Schoemaker, 1995, and can involve learning from the past and investigating. Whatif analysis scenario analysis, a decision making. The strategy is formulaic, and the net effect is a curious one, which the authors refer to as the scenario planning paradox. Formerly a strategic planner with royal dutchshells scenarioplanning group in london, dr. He is coauthor of a landmark book on the subject, winning decisions. The purpose of this was to steer clear of similarities between the two scenarioplanning sessions. Scenario planning helps you to prepare for alternative outcomes. Wharton on managing emerging technologies strategic.
Its an opportunity for you to use a tool, in conjunction with the other tools that youre using, that might help you better visualize the range of possible futures that you might be operating in, in your industry or market segment. Contingency planning is a what if tool, that only takes into account one uncertainty. Scenario planning is a disciplined method for imagining possible futures that companies have applied to a great. This article explains the whatif analysis or scenario analysis in a practical way. It is in large part an adaptation and generalization of classic methods used by military intelligence the original method was that a group of analysts would generate simulation games for policy makers. Schoemaker distinguishes the scenario develop process which is similar to most of the techniques that ringland describes as a different methods used by organisations. He is the founder and chairman of decision strategies international, inc. By enabling students to embrace uncertainty and to envision multiple future competitive environments, scenario planning provides the ability to craft multiple strategies and contingencies and better prepares todays students to anticipate tomorrows crises. Schoemaker took an extended sabbatical with the scenario planning group of royaldutch shell in london, and has since worked with over 100 organizations around the world. As schoemaker 1995 we can describe the process for developing scenarios in 10 from mba 601 at beirut arab university.
A tool for strategic thinking among the many tools a manager can use for strategic planning, scenario planning stands out for its ability to capture a whole range of possibilities in rich detail. Scenario planning differs from contingency planning, sensitivity analysis and computer simulation s. However, scenario planning considers combinations of uncertainties in each scenario. Scenario planning can be used to build plausible stories about the future and to, therefore, be better able to plan, lead, and manage during uncertain times. As schoemaker 1995 we can describe the process for. Scenario planning allows executives to explore and prepare for several alternative futures.
Finally some reflections of the role of system dynamics in scenario planning, modelling and analysis are provided. Summary organizations often fail to adapt and change because of cognitive inertia, escalation of commitment and groupthink scenario planning is a technique to facilitate strategic change. Scenario planning for innovation development, and, and. Paul schoemaker speakers bureau and booking agent info. Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible longterm plans. An ebook reader can be a software application for use on a computer such as microsofts free reader application, or a booksized computer this is used solely as a reading device such as nuvomedias rocket ebook. By identifying basic trends and uncertainties, a manager can. Describe the importance of scenario planning how it works and limitations. Contingency planning assesses what effect sudden market changes or business disruptions might have on a company and devises strategies to deal with them. Slides from my one day module on scenario planning at sse for the exec mba program in dec 2014 slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Scenario planning explores the different possibilities and capabilities that can be achieved through the new technology. Strategic planning with critical success factors and. On the following pages, ill explore this path to profiting from uncertainty in more detail. Among the many tools a manager can use for strategic planning, scenario planning stands out for its ability to capture a whole range of possibilities in rich detail.
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