Scenario Planning
Nature of the Problem
The board of directors and the stockholders of a large west coast aerospace organization are not happy. Sales are down and the company is facing its first fiscal loss in its history. Questions like “What happened?” and “Was someone asleep at the wheel?” are being asked. An earlier paper discussed how strategic planning could help the organization take the necessary steps to recover from their situation. In this paper another type of planning is going to be described, scenario planning. Simply stated, scenario planning offers the organization a means to act more quickly and decisively when some future event or crisis occurs. As discussed in the strategic planning paper, when things need to be turned around in an organization, all alternative ways of planning and responding to changing needs must be evaluated. Basic assumptions in this organization to drive all planning processes are: (a) change is inevitable, (b) the business environment is evolving, (c) technology will play a major role in both defining needs and shaping solutions in the future, and (d) improvements will benefit the organization profitability. Strategic planning still has its place in importance to the organization’s activities. Scenario planning adds to the tools that can be used to make timely and effective decisions to best ensure the future success of the organization.
Scenario Planning Model
Scenario planning, when completed, provides an organization with “what-if” stories that allow future events to be addressed as quickly and decisively as if these events had already occurred (Schwartz, 1996). Scenario planning is a process that involves doing organization homework ahead of time getting ready to act. It involves looking at wha ...