Organizations often implement scenario planning as part of their strategic planning strategy. Uncovering basic trends and uncertainties allow businesses to create a set of scenarios that will help compensate for general decision making errors.
Scenario planning empowers organizations to explore and prepare for several alternative future possibilities. It looks at outcomes an organization may expect under a variety of operating strategies and economic conditions.
By raising and testing different “what-if” scenarios, businesses can discover, discuss and challenge ideas in a hypothetical way before making or deciding on a one course of action.
The creative and structured approach of scenario planing helps to visualize future outcomes and often includes the following steps:
- Identify factors that may have the greatest impact on your organization’s future success.
- Assess the forces that are most critical or impact the future the most.
- Examine a small set of the uncertainties that contribute to dramatically different scenarios.
Incorporating scenario planning will help your identity future opportunities and risks. It will help you discover your ability to deal with them and create an action plan that takes potential changes into consideration.