Last week we covered Impact Analysis, a way to understand how different parts of your business relate to each other to help you predict the outcomes from decisions you might make. The great weakness in Impact Analysis is that it assumes your business is isolated and the only possible causes of changes are decisions that you make. Unfortunately, that is rarely true in reality! How do you account for changes in your market, competition and the economy when doing planning? Those changes can be even more impactful than your own decisions!
Scenario Planning is a planning technique originally developed in the 1950s to help the military better plan for unexpected changes. Prior to Scenario Planning, much military planning was done in ways similar to the Impact Analysis techniques,where the future was assumed to be very similar to the present. In contrast, Scenario Planning forces you to analyze many possible futures which may be very different from the present.
Scenario Planning will vary widely between businesses, because the future scenarios that you need to consider are dependent on your business. This week we’ll cover the basic framework of Scenario Planning so that you can apply it to your own needs.
Tomorrow we’ll get started by identifying the driving trends that will form the futures we need to consider!
Quote of the Day: “So what, so what, so what’s the scenario” – Scenario, A Tribe Called Quest