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Scenario Planning is a process for businesses to think about and plan for the future. Also referred to as Scenario Mapping, Scenario Development or Scenario Analysis, the process typically involves identify external trends and disruptive innovations, exploring how the future could unfold, what the consequences would be for the business, and how to respond with alternative strategic plans.
Description of Scenario Planning
Scenario Planning was originally used by military intelligence to make flexible long-term plans. It has been adapted to business situations over time, and was popularized as a tool for business strategy by Royal Dutch Shell. Scenario Planning generally contains four key steps:
- Decide what assumptions will be used as drivers for change (political, social, economic, technological)
- Identify the uncertainties that will have the most impact on your business
- Create a short list of conceivable scenarios
- Discuss the potential impact of each scenario and adjust your strategy accordingly
The best scenarios integrate multiple factors including political, environmental, technological, competitive, market, customer, and other external trends and forces. The goal is to explore unique combinations of these forces that create possible “scenarios” and that generate discussion around alternative approaches for influencing, avoiding, or simply preparing for alternative futures. Many organizations now use scenario planning in their strategic planning processes, often referring to the approach as Scenario Mapping, Scenario Development, or Contingency Planning.
Praxie's Online Scenario Planning Software Tools & Templates
Strategy teams often look at every decision they make through a microscope to determine what the best- and worst-case scenarios are for certain outcomes. Strategy teams and leaders can use the new online Scenario Planning template from Praxie to successfully implement Scenario Planning on an ongoing basis across their organization will rarely find they are surprised by unforeseen events or circumstances which might prove costly or risky. Scenario Planning is often considered a standalone tool to support strategic planning. Specific templates that are often part of Scenario Planning include the Impact-Uncertainty Matrix, Four Quadrant Scenario Grid, and Trigger Tracking Map.
Scenario Planning is a process for businesses to think about and plan for the future. Get started with our Scenario Planning template.
How to use it:
- List potential “driving forces” (variables) for the axes of your scenarios.
- Select variables and enter them into the axis names of your scenario chart.
- Name your scenarios and provide a one paragraph description that starts with “This is a world in which…”.
- Describe the “world” as if the scenario had come to fruition based on the variables selected.
- Once you have created your scenarios, identify the specific strategic implications of each and create plans to address them.
Unlike most traditional Scenario Planning strategy techniques, Praxie’s online Scenario Planning collaboration tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device. Many of our planning tools are part of our larger Business Strategy process since the first phases of strategy development include exploring emerging trends, the competitive landscape and customer needs. View video to learn more about the full strategy process: