Scenario Planning - The Case of Saudi Arabia
Posted By Rob Millard - 1 Comments -
The World Economic Forum has just published a series of scenarios titled The Kingdom of Saudi Arabia and the World: Scenarios to 2025. The link gives an overview of the study, a link to the executive summary and a link to a video interview with Nicholas Davis, one of the scenario planning experts involved in the study. (Hat tip to The Bayesian Heresy.)
Scenarios are a vastly underrated tool in the strategist's toolbox. Clifford Chance went through a widely publicized scenario planning exercise in 2005 but beyond that, they are not very widely used in professional service firm strategic planning processes. This is a pity, especially in today's highly dynamic and rapidly evolving markets, and firm's would do well to consider their use more closely.
Scenarios are very useful tools for looking at what may happen. Firms almost always tend to base their strategies on a fixed view, or at least a narrow forecast of what may occur in the future. Their strategic planning processes are also not generally good at considering cause-and-effect more than superficially, or just into the immediate future. As we all know, this raises the danger of unanticipated consequences or a strategy that does not fit with alternative futures that may emerge.
On the other hand, scenario planning really casts the net wide; to explore many different possible futures. Firms can use then use scenarios to test their strategies against this range of alternative futures, some of which they may not even have considered when crafting their strategy.
Scenarios can also make it easier to have uncomfortable discussions about difficult topics. This is because they aim to explore possibilities around those difficult topics, rather than being prescriptive about their solutions. They are really more about exploring the future; not about telling anyone what should or will happen.
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Mr. Millard, I appreciated your post here. I look forward to reviewing this material in more detail.
I wanted you to be aware of Art of the Future's approach to scenario work, which we call Structural Dynamics, since you are so clearly aware of the method's benefits. Here's a link to a program that provides an introduction to this approach: http://www.artofthefuture.com/SDcourse.html
I look forward to your feedback, if you have occasion to look this over.
Best,
Michael