MBA Blog: Scenario planning and exploring the future

The importance of planning for the unexpected

Scenario planning relates very closely to the Hindu doctrine of Karma. Balancing good and evil and repaying the virtue with appropriate reward is precisely what scenario planning does.

Scenario planning or analysis is a strategic tool that is used by managers and CEOs to visualise future conditions that have a high probability of occurrence and benefit or respond to them. Every organisation is in the quest for having a clear vision of the future to keep itself abreast of the dynamic situation. 

With change being the only constant and the essence of management it is imperative for an organisation to perfect ‘outside-in’ thinking skills. While managers must understand the significance of scenario thinking, poorly executed scenario planning leaves managers with a feeling that not much was achieved through the process. Many reduce scenario planning to a work of science fiction and do not apply the process well. Further, most managers are guilty of an over-reliance on routines and forget to apply managerial thinking.

It is pertinent to quote an example of BlackBerry mobile phones, once regarded as the lifeblood of corporate organisations for emails, which has sunk into a minority position in the mobile phone market. At one time, when a push email system was virtually nonexistent, BlackBerry phones responded to this need. Today, when the mobile phone market is flooded with phones that have the same facilities that BlackBerry phones have to offer, if not more, there is a trick in the book that BlackBerry missed. Value of a product is created in a domain of scarcity and not abundance.

Did BlackBerry use scenario planning? And if they did, didn’t the foresee iPhone and Samsung as their threats? This pitiable situation of BlackBerry phones has shown us that tougher approach to strategic thinking is the need of the hour. Understanding the contextual environment and the ones own organisation is decisive to develop a tangible and sensible scenario planning process.

While developing the scenario planning process, practitioners must develop and see the big picture by using a helicopter view rather than getting caught with smaller details. Another vital step is to balance short term and long term perspectives by taking into account measurable and non measurable factors.

Iceberg analysis in scenario planning is another great tool organisation must use. In the occurrence of some events, organisations must unearth and enquire the sequence of events to understand it. In such enquiry, organisations come across various stakeholders and prime movers in the events who contribute immensely to understand the present situation.

A statistic shows that on an average, most managers spend less than three per cent of their time thinking about the future and building a corporate perspective on the future. In addition, most managers today have emerged as energetic problem solvers rather than thinking about the future. This results in most difficult questions going unanswered and fire fighting becomes the order of the day. This can be clearly seen in the case of BlackBerry which seems to be in a fire fighting mode rather than concentrating on developing new phones and software. This is precisely the reason why companies lose their strategic edge and do not see or wish to see the problem until it’s too late.

With scenario planning having many benefits such as enhanced perception and enhanced complexity handling skills it is one sure shot mantra for long term survival and success.

Keynes said it best: “The difficulty lies not so much in developing new ideas, as in escaping from the old ones.”

Hemant Chandran is a finance professional and MBA from Strathclyde Business School. He is also an AMBA Global AMBAssador

News
people
News
people And here is why...
News
peopleStella McCartney apologises over controversial Instagram picture
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
PROMOTED VIDEO
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsWelsh town changes its name, but can you spot the difference?
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs Student

Associate Recrutiment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: SThree Group have been well ...

Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE: SThree: Real Staffing Group is seeking Traine...

PMLD Teacher

Competitive: Randstad Education Manchester: SEN Teacher urgently required for ...

SEN Teaching Assistant Runcorn

£50 per day: Randstad Education Cheshire: SEN Teaching Assistant EBD , Septemb...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Time to stop running: At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity

Time to stop running

At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence