A Handbook for Scenario Planning

April 1, 2010 — Leave a comment

A Handbook for Scenario Planning The Scenario Planning Handbook: Developing Strategies in Uncertain Times by Bill Ralston and Ian Wilson. Thompson Publishing. 2006. 256 pages. $34.95.

Practicing futurists Bill Ralston and Ian Wilson offer practical guidelines for using scenarios in business settings.

The word “scenario,” first coined around 1875, was originally understood to be an outline or synopsis of a dramatic work. Whereas the script provided a very detailed account of the lines that the actors were to deliver, the scenario simply imagined a sequence of events and allowed for both chaos and improvisation.

Today, scenarios are among the most important tools that both professional and amateur futurists use to craft effective strategies. The word is thrown about quite a bit, but its central meaning has not much changed since the nineteenth century. The scenario remains a narrative device, a sketch detailing a likely sequence of events. What was once a tool for actors has become a tool for anyone and everyone looking to chart a course of action.

What distinguishes a good scenario from a poor one? According to veteran scenario planners Bill Ralston and Ian Wilson, an effective scenario does not purport to see the future (an impossible proposition); it merely informs the decision-making process and emboldens the choicemaker to execute his or her strategy. Whether in the hands of the thespian or the CEO, the scenario remains an outline-hopefully an educated one-but one that allows for improvisation.

In The Scenario Planning Handbook: Developing Strategies in Uncertain Times, Ralston and Wilson, both with SRI International, have assembled a comprehensive guide on how to use scenarios in a corporate setting for maximum advantage.

The book defines and explains various approaches to scenario planning in rigorous detail, but also features good information on scenarios generally. It includes real-world case studies of these tools in action at firms such as Nokia and Royal Dutch Shell, which was instrumental in the popularization of the SRI model.

The authors also describe how to use scenarios to create a “changeoriented culture” within an organization.

“Scenarios are more than a new methodology,” say Ralston and Wilson. “They entail a new way of thinking about the future, a new approach to strategic planning and decision making, and a pronounced shift in the prevailing management culture. Left to itself, the ‘old order’ will always seek to reassert itself and relegate scenarios to, at best, a position of merely ‘interesting studies’ of the future. We need, at the outset, to recognize the barriers to change and to the effective use of scenarios, and devise programs to surmount them.”

The book is rich with technical detail as well as helpful graphs, charts, and appendices. If Ralston and Wilson forgot anything in penning The Scenario Planning Handbook, it was to follow their own advice. While the book makes clear the importance of creating a “change-oriented culture” within a company, it fails to touch on the change-oriented culture that is forming outside of today’s corporate boardrooms, across society at large.

Absent in the handbook is any discussion on how to use scenarios to help corporations act more ethically, responsibly, or with greater concern for their workers, the environment, or humanity. For instance, Ralston and Wilson pay homage to how Royal Dutch Shell, during the early 1990s, used scenarios to plot the declining price of oil as a result of new oil field discoveries, some of which were located off the coast of Scotland. The authors do not mention that, to exploit that oil, Shell chose to build a pipeline construction facility near the area of Morrich More, jeopardizing an area of Special Scientific Interest and a European Community protected area.

Ralston and Wilson might argue that such concerns are tangential to the crafting of scenarios for the purpose of achieving corporate objectives. But isn’t the true value of a scenario as a lens for the examination of actions and consequences? What better time to discuss the worthiness of a particular goal-finding another oil field vs. protecting an area of outstanding natural beauty-than when crafting a scenario?

Regardless of this omission, The Scenario Planning Handbook should be of great use to anyone charged with drafting a management plan or strategy on behalf of a corporation.

Originally published in THE FUTURIST, January-February 2006.

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