Presented by:
Suzanne K. Lemen,
SPHR

• Understand use of scenario thinking in planning process
• Understand eight steps to scenario planning
• Develop an Action Plan for the use of Scenario Planning in your
organization

Role of HR in Planning Process
Strategic HR Requirements:
» Part of Planning Team
» Must Understand Business
» Provides the Human Capital
Perspective
» Assists the Leadership Team in
Innovative Ways of Thinking about
Planning

Scenario Thinking Enhances
The Planning Process
– Scenario Thinking has been around for 40 years
– Military has used the process since 1940
– Recently became very Popular
– Used by many of the Top Companies
– Important Tool in these Uncertain Times

Why You Should Care????
– World is Changing Rapidly
– Changes include:
» Political/Governmental Affects
» Natural Disasters
» Terrorism
» Product Tampering
» Infrastructure Compromises
» Global Issues
» Opportunities
» Others

What Scenarios Could Affect Your
Business?
What Scenarios Are Beyond Your
Comprehension?

Traditional Planning
1. Define Business Goal or Objective
2. Gather Information – Internal/External
3. Develop Alternative Strategies
4. Implement Plan
5. Evaluate and Revise as Needed

Traditional Planning
Very Linear
Systematic
Based on Forecasting
Good to Use in Stable Environment

What Happens in Today’s
Environment?
•Shelf Dust
•Organizations Unprepared for the
Unexpected
•Implementation of
Strategies that lead to
Disaster
•Lowered Earnings,
Decline of Business

Scenario Planning
• AKA Scenario Thinking
• Creates a Map of
Uncertainty
• Stories of the Future that Might Unfold
• Not Predictions

Scenario Planning
• Scenarios can be positive or negative
• Different way of Thinking about the Future
• Helps the Organization to be Better Prepared
• Can Result in Surprising
Outcomes

Example: Oil Prices
• Historically Oil Prices have been Forecasted
• In the 1970’s Oil Companies
Realized that Forecasting
Might be Dated
• Scenario Planning led to
Huge Profits as Prices rose
Rapidly

Example: Price of Silicon Chip
• Vision of Individual
PC’s
• Smaller, Faster,
Cheaper
• $100 Laptop for every
Child in Developing
Nations
• What’s Next?

Scenarios as a Competitive
Advantage
Each Example:
• Organization was Prepared
• Able to Act Quickly
• Beat Competitors
• Avoided Risk

Thinking in a Non-Linear Way
Why?
Challenge
Always True?
Perspective
Another Way?
Possibilities

Thinking in a Non-Linear Way
• Get Diversity
• Look Far Out into the
Future
• Think from the External and not the Internal
• Keep asking Why about Assumptions
• Consider the What If’s

Thinking in a Non-Linear Way
Let’s Try It
• Find a Partner
• Spend 3 Minutes
• What will happen with the
Price of Oil 10 years from
Now in the USA

Thinking in a Non-Linear Way
What did you Consider?
• External forces
• Political forces
• Terrorism
• Innovation
• Technology
• Resources from Outer
Space

Thinking in a Non-Linear Way
Hard?
Easy?
Was it Out of the Box?
Uncomfortable?
These are all Challenges to Scenario Thinking

Scenario Planning
• Must Create a Map for
Possible Futures
• Use the Mapping to pick the best Strategies
• Goal is to Make Strategic
Decisions for all Plausible
Futures

Scenario Planning - Example
• Food Business
• Scenario identified that
Government Outlaws
High Fructose Corn
Syrup
• How does this affect choice of Strategies?

Scenario Planning - Steps
Step One – Key Decisions
 What determines success?
 Circumstances that lead to success or failure?
 Where is industry going?
 Consider prejudices/assumptions
 Consider Business System Issues

Scenario Planning -Steps
Step Two – Do Homework
 Internal Scan
 External Scan
 Open to the Unexpected
 Consider Science and Technology
 New ideas/Fringe Ideas
 Perception Changing Events

Scenario Planning -Steps
Step Three – Identify Driving Forces of Scenario
 Elements that Move the Plot of the Scenario
 Social/Demographics
 Technology
 Economics/Politics
 Environmental
Little Control over Driving Forces

Step Four – Identify Predetermined
Elements
No matter which Scenario it Will be True
Example: Baby Bust
Finite amount of Oil

Scenario Planning -Steps
Step Five – Identify Critical Uncertainties
 Plan for them
 Question Assumptions of Predetermined
Elements
 These are the Variables in the Scenarios
 Create parallel scenarios
 Identify two or three factors that are the most important and most uncertain
 Goal is to have a few scenarios that really make a difference

Scenario Planning -Steps
Step Six – Compose Scenarios
 Diverse planning team meets
 Bring Research
 Answer Questions:
Uncertain
Inevitable
What if this Scenario
 Combine into 2 or 3 scenarios

Scenario Planning -Steps
Step Seven – Analyze Decisions
Relative to Scenarios
 How does Decision look?
 What are Vulnerabilities?
 If looks good in only one scenario then it is high Risk
 Adapt Strategy?

Scenario Planning -Steps
Step Eight – Select Indicators
 As History Unfolds, Monitor
Indicators
 Scenarios then lead to Industry specific implications and action plans

Using Scenario Planning
 Strategic Planning Process
 Any Planning Process
 Method of Making Better Decisions
How will you Implement
Concepts Today in Your
Business?

Suzanne K. Lemen, SPHR
Dynamic Corporate Solutions, Inc.
Phone 904-278-5383
slemen@dynamiccorp.com
www.dynamiccorp.com