In ancient times, leaders needed only ask the nearest oracle for guidance in
battle strategies. Today, if senior managers could ask an oracle about the
future of their businesses—changing consumer demands, technology developments
and obstacles, shifting markets, and unruly economic and regulatory forces—they
could devise foolproof strategic plans and count on steady growth.
But the twenty-first century is short on oracles, so executives must find other
ways to understand complex environments and make major strategic decisions.
Scenario planning is the next best thing to oracles, providing a tool for
exploring the future and developing strategies for thriving in new environments.
Scenario planning has been around since the 1970s, when FT - BSC joined forces
with Royal Dutch/Shell and General Electric to develop the methodology. Since
then, FT - BSC has taken the process to companies in a mix of industries, from
technology-driven companies to chemical, consumer, and manufacturing
operations.
Though the benefits of scenario planning are great, the tool is not ideal for
every company. The process is demanding and challenging and requires a strong
commitment by senior management to be effective. To succeed, a company needs an
extensive knowledge base, interdepartmental cooperation, a commitment to
learning, and the ability to blend highly disciplined analysis with
free-spirited, imaginative thinking.
The Benefits
Scenarios are a stimulating planning tool that can
help your company:
·
Anticipate and
leverage change.
Scenarios can help you identify surprises and
discontinuities in every area of your business, from customer demand and
adoption of new technologies to changing market and regulatory environments.
You can uncover competitive shortfalls and identify potential new markets and
opportunities for growth.
·
Stimulate
"out-of-the-box" thinking.
By encouraging management to stretch beyond
traditional problem-solving approaches, scenario planning can help break old
paradigms and prompt big moves rather than incremental change.
·
Reduce risk.
Scenarios allow you to evaluate and select new
ventures or acquisitions long before you make investments. Your company can
avoid bad investments by recognizing warning signals early and evaluating
unfolding developments.
·
Develop a
consistent framework.
Scenarios can give your company a common framework
and language for discussing and dealing with complex conditions.
·
Translate
strategy into action.
Integrating scenarios into the strategic-planning
process ensures that your company will focus on future growth and renewal.
FT - BSC's Approach
FT - BSC developed its scenario-planning
methodology 25 years ago and remains a leader in helping clients apply the
approach to their businesses. A multidisciplinary team works with clients to
identify and analyse issues, develop scenarios, and create strategies for
competing successfully in today's complex environment. You can count on us for:
·
A decision
focus.
We help you pinpoint the strategic decision areas
that are critical to your company.
·
Analysis.
What does your management need to know about the
future to make better decisions? We help you identify the macro- and micro-environmental
forces likely to affect future decisions.
·
Scenarios.
We work with you to create a set of scenarios that
reflect critical drivers, environmental forces, and uncertainties in each of
the decision areas you've identified. Each scenario sets forth a story line in
two to three pages, illustrates scenario differences in a table, and quantifies
key factors. Participants in the process then role-play the scenarios to
highlight the implications of each scenario for the business.
·
Strategy and
action.
We help you identify strategy and action
alternatives in each scenario, evaluate the alternatives, and select the one
that best fits your needs.
·
Focused
monitoring and intelligence analysis.
The last step in the process is to identify
impending discontinuities and trends in the scenarios so that you can monitor
developments and make timely strategic adjustments.
Can we help?
To improve your strategy making, contact Vandana
Pareek, Vice President, at Business &
Consulting.