“Scenarios can’t predict the future, so what’s the point?”
[Have now added appropriate tags…omission reflects the fragmented nature of my mind at the moment.]
Scenario planning is about predicting possible futures further ahead than just the foreseeable future, that of a few months or 1-2 years. Strategy planning extrapolates data from the past and uses current trends to predict short-term directions. Trends change over a longer period of time and so are unreliable indicators of change. In addition, there are many unexpected events that can change the direction of the future (eg. Christchurch earthquake). The key is in preparing for possible futures.
The video emphasises that businesses are better at preparing rather than predicting, but shouldn’t limit themselves to preparing for one possible future as there are many possibilities. The challenge is to use current drivers and uncertainties to predict the most probable futures, and prepare for those. It’s about preparing to face the most relevant effects of change.
Freeman identifies an important distinction of scenario planning. Scenario planning helps us visualise what influential factors such as “Ideas, Nature, Society, Politics, Economics, Culture, and Technology” might have on the future. Because there are a wide range of external factors, it is equally important to include perspectives from a wide range of people in the scenario planning. Once possible futures are visualised (also described as stories) we can work backwards to identify what strategies should be put in place to prepare for those plausible, possible futures.
So, the point of scenario planning is not to try to predict the future but predict several plausible futures so that strategies can be put in place in preparation for any likely eventuality.