Sunday 01 May 2016
The need to anticipate future change and implement coherent yet adaptable strategies that shape world events is one of the greatest challenges facing today’s national leaders. Even when the goals at the national level are clear, the ability to anticipate the future to ensure success at the strategic level remains a crucial yet highly risky capability. Thus tools for effective strategic planning merit greater understanding. Scenario planning is one of the most powerful ways for strategic leaders to make future decisions.
Scenario planning, or scenario analysis, is a strategic planning method that organizations and nations can use to create flexible long-range strategies. The key element of this process, is the production of highly realistic scenarios for decision makers. Such scenarios should be creative portraits of a plausible future world. The scenarios usually include plausible, but unexpectedly divergent situations and problems that may not currently exist; analysts commonly select scenarios that are possible, yet uncomfortable.
One current example scenario, New Nations of the World, envisions that by 2050, five superpowers will emerge from the turmoil of our current decade: the People’s Republic of China, the Russian Federation, a new North American Union, India, and a new South American Federation. In that scenario other regional powers of significance will also emerge to dominate the international order. Such a new balance of power scenario can help strategists understand and deal with change.
To develop such robust scenarios strategists determine drivers for change and key assumptions, then choose a framework for thinking about the future and outline the plausible scenarios. Then they select the most valuable scenarios, explore and analyze them, and identify the key pathways for future success. Though relatively simple, this scenario development process requires a great deal of disciplined creative thinking.
The scenario planning follows seven steps: (1) identify desired outcomes, (2) brainstorm scenarios; (3) map outcomes; (4) prioritize uncertainties and opportunities; (5) summarize what is important for the future; (6) create an action plan; and (7) act to achieve goals.
Scenario planning helps policy-makers anticipate hidden weaknesses and inflexibilities in organizations and their methods. The analysis of such scenarios combines known facts, such as demographics, geography, military, political, industrial information, with key driving forces, such as social, technical, economic, environmental, and political trends.
Effective scenario planning involves recognition that multiple factors can combine in complex ways to create surprising futures. Scenario planning also allows the inclusion of emerging factors, such as novel insights about the future, deep shifts in cultural values, or new inventions.
Systems thinking used in conjunction with scenario planning lead to a greater spectrum of possible outcomes because the linkages among various factors can be analyzed productively. Through such analysis leaders can be better prepared to make decisions as events unfold.
With the current crisis in Yemen and possible coalition operations likely in Syria, the UAE will be faced with potentially conflicting requirements over the next two years that could pull our national effort in different directions; the next three years leading up to Expo 2020 could be even more volatile as we approach one of the most important events in UAE history.
Forecasting scenarios for the following 30 years, until the end of oil dominated economy, is even more challenging, yet crucial for the UAE. Managing our national advance while ensuring the national interests of the UAE are met over such a complex span of time can be greatly aided by scenario planning and other tools designed to enhance strategic decision-making.