To ensure survival, businesses need to plan. They need to anticipate the future and prepare for events that could happen.
Classical approaches to forecasting include trend analysis using moving averages, for example. These assume that business will continue in a similar fashion to the past - extrapolating from the present to the future. Unfortunately the future is not this predictable - especially when you need to think five, ten or more years ahead. And businesses often do need to plan this far ahead - whether it is looking at a new lease on a building, or planning for the expiry of a patent.
With the speed that technology is changing it is becoming difficult to think of how things will be even three or four years into the future, never mind further forward. All that one can say for certain is that tomorrow will not be the same as today.
Scenario Planning is a tool that enables organizations to look at the factors impacting their business and its environment. It uses these factors to construct pictures or scenarios of possible and plausible futures and these are then used to prepare and plan for what could happen.
More and more companies are including scenario plans as a key element of their long-term strategic planning. Companies using the technique have reported remarkable successes - Shell, for example, has used scenarios for many years, and predicted the Oil Crisis of the 1970s, and the changes that took place prior and immediately after the fall of the Soviet Union in the early 1990s.
As another example, AWARE's managing director, Arthur Weiss, first looked at the implications of the World Wide Web and the Internet in 1993 - just over a couple of years after it's invention by Tim Berners Lee in mid-1991. We launched our web site in June 1995 as a result. AWARE is thus one of the oldest companies to have a web presence - we had a web site well before more than 95% of all other companies world-wide. You may be using Internet Explorer or Firefox to view our pages. When we launched, Netscape Navigator v1.0 was the only commercial web browser - we were there before even Microsoft had realised the commercial significance of the web. We practice what we preach - and anticipate future markets in our own planning processes.
AWARE can help you anticipate the future by training your staff in the scenario planning technique. We can also work alongside you in drafting up scenarios for your industry, business and for competitors. We offer organizations support in all aspects of scenario planning:
- training, showing how to construct a scenario plan
- facilitation - working with an organization's scenario planners to ensure objectivity while the scenarios are developed
- research to identify the key uncertainty factors impacting the organization.