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

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs Student

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant Bristol

£18000 - £23000 per annum + + uncapped commission + benefits: SThree: Did you ...

SThree: Recruitment Consultant

£20000 - £25000 per annum + benefits + uncapped commission: SThree: Did you kn...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence