The Goal
Stress-test the strategy against four plausible futures before you commit to it: pick the two uncertainties that matter most, name the worlds they create, find the world that breaks the plan, and leave with one move that holds up and one signal that tells you when to act.
Ideal For
Leadership teams about to make a multi-year bet when the future could go more than one way: strategy offsites, multi-year plans, M&A and capability investments, and board pre-reads.
The Shift
From plan for the future we expect to stress-test against the futures we don’t.
The Science
Thinking through several scenarios tends to widen the range of futures people consider and temper overconfidence in a single forecast. In a study of experienced managers, working through scenarios shifted their judgment toward investments that held up across futures. And imagining that a failure has already happened tends to surface more reasons for it than asking whether it might.
Also runs as a half day · P4.8 HD
Scenario Mapping – Half Day
Half day (3 h 30 min), the full scenario build: forces sorted into what will happen anyway and what nobody can call, four worlds built in depth, the current strategy and two alternatives wind-tunnelled in every world, and a signpost for each world, with a quarterly signpost review.
from one forecast and a plan for it→to four worlds, a strategy that holds, and signposts we watch
The Goal
Build four plausible futures in depth and test the strategy against all of them: separate what will happen anyway from what nobody can call, develop each world until it is believable, wind-tunnel the current strategy and its alternatives, and set a signpost for every world with an owner and a review.
Ideal For
Leadership teams setting a multi-year strategy or making a large, hard-to-reverse bet when the future could go more than one way: strategy offsites, multi-year plans, M&A and capability investments, and board strategy sessions.
The Science
Thinking through several scenarios tends to widen the range of futures people consider and temper overconfidence in a single forecast. In a study of experienced managers, working through scenarios shifted their judgment toward investments that held up across futures. And imagining that a failure has already happened tends to surface more reasons for it than asking whether it might.
The techniques, and why they work
Sort the forces, then pick the axes
What will hold in every world goes into all four; the two most important, independent uncertainties become the axes, each written as opposite outcomes. Thinking through several scenarios tends to widen the range of futures people consider.
Build the world you least want
Each group develops the world its members least want, in enough detail to argue with, and the room challenges it for believability. The uncomfortable future is the one plans tend to skip.
Wind-tunnel the strategies, then watch
The current strategy and two alternatives are tested in every world; the moves are sorted into robust bets, hedges and options; every world gets a signpost with an owner. Imagining a failure has already happened tends to surface more reasons for it, and working through scenarios tends to shift judgment toward bets that hold across futures.
Selected research
- Schoemaker, P. J. H. (1993). Multiple scenario development: Its conceptual and behavioral foundation. Strategic Management Journal, 14(3), 193–213.
- Phadnis, S., Caplice, C., Sheffi, Y., & Singh, M. (2015). Effect of scenario planning on field experts’ judgment of long-range investment decisions. Strategic Management Journal, 36(9), 1401–1411.
- Mitchell, D. J., Russo, J. E., & Pennington, N. (1989). Back to the future: Temporal perspective in the explanation of events. Journal of Behavioral Decision Making, 2(1), 25–38.
- Gollwitzer, P. M., & Sheeran, P. (2006). Implementation intentions and goal achievement: A meta-analysis of effects and processes. Advances in Experimental Social Psychology, 38, 69–119.
- Wack, P. (1985). Scenarios: Uncharted waters ahead. Harvard Business Review, 63(5), 73–89. (Practitioner source.)
- Schwartz, P. (1991). The Art of the Long View. Doubleday Currency. (Practitioner source.)