And, ideally, these uncertainties represent on each axis,
they represent a spectrum.
And so, you're sort of almost looking for the extremes.
What you're ideally trying to construct, or
in this case four scenarios that are as nearly mutually exclusive as they can be.
So, you're looking for
very different assumptions about how these uncertainties will play out.
And when you lay all that out on your grid like this,
you can see that you essentially construct four different scenarios, A, B, C and D.
And, again, ideally, these scenarios should be sort of
dramatically different from one another and
represent four different possible futures for your industry or market segment.
So, that's step three.
Step four is to then really spend some time brainstorming and
exercising your creativity to visualize those scenarios.
You want to get into the details.
Here, again, it might be useful to get outsiders perspective of
if the future works out in a certain quadrant that
realizes certain uncertainties, what would that future look like?
What would business be like in that particular scenario?
It might be helpful to sort of write stories or
construct hypothetical newspaper headlines for each of these four possible futures.
Give them a title.
Think about what scenario A is and what scenario D is, and
give them descriptive titles and think about them in sort of vivid detail.
This is the creative part of scenario planning that's helping you to kind of
think outside the box, to think differently than you may
have thought before about the potential futures that your business faces.
So, once you've done all that, then you want to move to step five.
And step five is to then examine the robustness of your strategy
across all of these different scenarios.
Is your particular strategic direction you're moving in,
is it robust across all of those scenarios?
Would you be a viable, successful organization in each of those futures?
Or does your current strategic direction sort of rely on
the future working out a certain way to be beneficial for you?
And if that's the case, this is what you're looking for.
You're looking for opportunities to sort of adjust and
potentially make some changes to your strategy that might make it more robust
across all these different scenarios.
Now, the scenarios that, different scenarios you've created with your grid,
of course, are based on two different uncertainties, and
there may be others that are important as well.
So, you might want to repeat this scenario planning process for several different
combinations of scenarios that might yield different insights.
And it's important to understand that, even after you done all this,
you might decide that you want to make the riskier strategic move of
moving in a direction that isn't robust across all those scenarios.
And it does really depend on realizing one particular future scenario.
And that's fine.
But if you do that, you want to recognize that that is a risk that you're taking.
And this framework will help you see that as a risk,
and you'll see what the vulnerabilities are.
So, this is scenario planning.
It's an opportunity for you to use a tool in conjunction with the other tools you're
using that might help you better visualize the range of possible futures that you
might be operating in in your industry or market segment.