Scenario planning is a team activity comprising the following five steps:

1. The team identifies the focal issue or impending decision that makes the scenario necessary.

2. The team explores the “driving forces” that will be shaping the future environment, i.e. changes in technology, regulation, the competition, and the customers. The team then ranks these driving forces in terms of importance and uncertainty, placing the most important and most uncertain highest; important uncertainties will drive scenarios apart.

3.  Working with crucial uncertainties, the team identifies the scenario logics or basic plot lines. The goal is to develop plausible and surprising (and even shocking) scenarios. First develop the “official scenario” and then develop unthinkable futures exacerbated by crucial uncertainties. Give each a colorful name. Develop between 2 and 5 scenarios – no more.

4. The team goes back to the focusing issue or decision to decide on a strategy that will accommodate all the scenarios (a “robust” or an “adaptive” strategy) - a strategy that is exceptionally alert to changing events.

5. The team then identifies some leading indicators that will be monitored to see which scenario (if any) is actually occurring in life.

 

Scenario planning is unconcerned with predicting the future but rather with identifying a range of probable futures which will facilitate easier course correction as time passes and events unfold. It is an ongoing activity at the heart of enterprise planning and marketing activities.