excerpts from “key lessons for adopting scenario planning in.docVIP

Excerpts from “Key Lessons for Adopting Scenario Planning in Diversified Companies” Daniel G. Simpson, Planning Review; Oxford; May/Jun 1992 BACKGROUND: WHAT IS SCENARIO PLANNING? Scenario planning is the process of constructing alternate futures of a business external environment. The goal is to learn to use these alternative futures to test the resiliency of todays action plan. The best rationale for scenario planning is articulated by Catherine Bateson, currently a professor at George Mason University, in a new book on corporate responsibility, The Nissan Report: Any organism acts not in response to external reality but in response to an internally constructed version of that reality after it has passed through a series of filters. Human beings filter through what we call attention and on the basis of what we call relevance. These filters are critically important to successful management since it is impossible to digest all the information available. The main question addressed by scenarios is whether a corporations established filters are blocking important information that will be either valuable or harmful if withheld. Scenario planning originated at Royal Dutch/Shell in London and is most often used by businesses that are extremely sensitive to external factors beyond their control--energy and public utility businesses, for example. For a variety of reasons, the consumer packaged goods industry tends not to be as highly sensitive to its external environment. Initially, I was not convinced that the scenario planning process would be productive in my industry. I am now convinced. While consumer products companies are less sensitive to the external environment than those in some other industries, that differential is changing. The most powerful agent of transformation is information technology in the distribution channel; however, changes in advertising and media delivery are also occurring. The regulatory environment is becoming an increasingly important facto