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Scenario planning is the best tool for making strategic decisions in an environment of uncertainty. In ancient times, leaders needed only ask the nearest oracle for guidance in battle strategies. Today, if senior managers could ask an oracle about the future of their businesses—changing consumer demands, technology developments and obstacles, shifting markets, and unruly economic and regulatory forces—they could devise foolproof strategic plans and count on steady growth. But the twenty-first century is short on oracles, so executives must find other ways to understand complex environments and make major strategic decisions. Scenario planning is the best approach for exploring the future and developing strategies for thriving in new environments.
Scenario planning has been around since the 1970s, when SRIC-BI joined forces with Royal Dutch/Shell and General Electric to develop the methodology. Since then, SRIC-BI has taken the process to companies in a mix of industries, from technology-driven companies to chemical, consumer, and manufacturing operations.
The Benefits
- Anticipate and leverage change. Scenarios can help you identify surprises and discontinuities in every area of your business, from customer demand and adoption of new technologies to changing market and regulatory environments.
- Stimulate "out-of-the-box" thinking. By encouraging management to stretch beyond traditional problem-solving approaches, scenario planning can help break old paradigms and prompt big moves rather than incremental change.
- Reduce risk. Scenarios allow you to evaluate and select new ventures or acquisitions long before you make investments. Your company can avoid bad investments by recognizing warning signals early and evaluating unfolding developments.
- Develop a consistent framework. Scenarios can give your company a common framework and language for discussing and dealing with complex conditions.
- Translate strategy into action. Integrating scenarios into the strategic-planning process ensures that your company will focus on future growth and renewal.
SRIC-BI's Approach
SRIC-BI developed its scenario-planning methodology 25 years ago and remains a leader in helping clients apply the approach to their businesses. A multidisciplinary team works with clients to identify and analyze issues, develop scenarios, and create strategies for competing successfully in today's complex environment. You can count on us for:
- A decision focus. We help you pinpoint the strategic decision areas that are critical to your company.
- Analysis. What does your management need to know about the future to make better decisions? We help you identify the macro- and microenvironmental forces likely to affect future decisions.
- Scenarios. We work with you to create a set of scenarios that reflect critical drivers, environmental forces, and uncertainties in each of the decision areas you've identified. Each scenario sets forth a story line in two to three pages, illustrates scenario differences in a table, and quantifies key factors. Participants in the process then role-play the scenarios to highlight the implications of each scenario for the business.
- Strategy and action. We help you identify strategy and action alternatives in each scenario, evaluate the alternatives, and select the one that best fits your needs.
- Focused monitoring and intelligence analysis. The last step in the process is to identify impending discontinuities and trends in the scenarios so that you can monitor developments and make timely strategic adjustments.
Case Studies
Strategic Planning and Technology Management
SRIC-BI assisted a large European semiconductor company in developing a long-term growth strategy for the IT/semiconductor business. SRIC-BI used its scenario-planning methodology to create four plausible scenarios reflecting the uncertainties within the external environment in which the company operates. These scenarios served as a backdrop for development of a wide range of opportunities and strategy alternatives and for testing strategy alternatives. This highly interactive project with senior management resulted in SRIC-BI's recommending strategies and associated acquisitions for the company's front-end and back-end equipment businesses. |
Long-Term Scenario-Based Framework for Technology Strategy and Planning
For one of the largest global players in the refining and petrochemicals business, SRIC-BI assisted in the creation of a long-term scenario-based framework for technology-strategy and annual-budget planning. We initially conducted broad research on trends relating to the external environment in which the company operates. In two scenario workshops, the project team identified the company's key strategic considerations and external forces facing the petrochemical industry in the next 20 years. A final scenario-implications workshop set the stage for the company's selection of strategies by systematically exploring opportunities specific to each scenario and evaluating their robustness across the scenarios. The key learnings from this project involved challenges to business-as-usual thinking and the development of a framework to build robust technology strategies and track the future as it unfolds. We identified signposts for each scenario to provide a useful basis for tracking the external environment to allow early strategy adjustments. |
Utility-Customer Service and Marketing Strategy
SRIC-BI facilitated scenario-planning workshops for the customer-service and marketing-management team for a major U.S. electric utility. The objective of the workshops was to develop a strategy for the management team. In the three workshops, SRIC-BI assisted the team to develop scenarios of the external environment for the company, consider the implications of the scenarios for customer service and marketing, develop business options, and select the best-integrated approach. |
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