Scenario Planning

Today, business leaders need to understand more complicated environments. Matridakis, Hogarth, Gaba (2010) argues that traditional tools are not suitable for new complex environments. We can not explain the level of complex environments and uncertainties with forecasts, but the most traditional methods, such as strategic planning and organization development approaches, use the past trends to predict the future.

What underlies the scenario plan is research on military strategies. Herman Kahn is the founder of his early scenario-based research on potential scenarios in connection with the heat nuclear warfare ("incredible thinking"). In the latter half of the 1960s and early 1970s, the scenario was converted to commercial tools by Pierre Wack, which developed the scenario planning system used especially by Royal Dutch / Shell. As a result of these efforts, Shell responds to the oil crisis that occurred at the end of 1973 and is ready to greatly enhance the competitiveness in the industry between the oil crisis and the subsequent oversupply of oil.

From relatively simple tactical decisions to complex strategic planning and vision building processes, many organizations apply scenario planning to a wide range of issues. The power of scenario planning was established by Royal Dutch Shell, which originally used scenarios as part of the process of generating and evaluating strategic choices from the early 1970s. Shell's oil forecast is superior to other major oil companies, and the overproduction capacity of tanker business and European petrochemical products exceeds that of competitors. As many other companies and consulting companies also begin to benefit from scenario planning, this approach may have a greater impact on the shell than internal influences. Scenario planning is as artistic as science, and there are likely to occur various pitfalls (including processes and content) cited by Paul J. H. Schoemaker.