Painting Scenarios

...assessing how your organization would fare in each circumstance.

Some factors move unpredictably, so it is not possible to use historical data to predict future movements. For these, scenario planning is more appropriate. This form of planning involves painting alternative scenes -- images of your future business environment -- assessing how your organization would fare in each circumstance. A classic case is the price of oil, which fluctuates in response to a complex mix of political, financial, and production factors.

One scenario envisages oil prices remaining stable over three years; another has prices at 150 percent of current levels; and a third has them at 75 percent. How would your business be affected by each? How would each influence your strategy?

ACTION POINT: Paint alternate images of the future business environment to determine how you may react to them.