Today private and public organizations face three challenges: increasing uncertainty, increasing
complexity and increasing competition. They have to consider three approaches in order to master
- Coping with uncertainty: Today changes are standard. Rigid prognoses fail. Therefore, companies have to accept that the future is no longer predictable. Moreover, they should anticipate alternative future paths and integrate these multiple futures into their strategic planning. This approach is called future-open thinking.
- Handling complexity: Many markets and industries are converging. The amount of relevant influence factors is increasing and it is difficult to understand their interactions. Thus companies must learn to understand these interactions and the behavior of such systems so effective strategies can be developed. This approach is called systems thinking.
- Using future chances: In a situation of increasing competition it is important to be one step ahead. Therefore, companies should not only concentrate on short term success. They have to identify future possibilities and risks early enough in order to integrate them in their decision process. This is the core of strategic thinking.
In case multiple alternative future developments are revealed which are based on linked thinking, we refer to them as scenarios.Scenario development in the context of strategic decision making processes is one of the main subjects of Scenario Management™. The usage of scenarios focuses on three different application areas:
- In the context of strategy development, scenarios are implemented in order to think ahead of market and external conditions as well as to reveal own options for actions. This process then leads to robust visions and strategies as well as to a closer observation of critical indicators in the context of strategic early detection.
- The success of the enterprise stands and falls with the implementation of the evaluated strategic direction of impact. Such a change and transformation process is being created and supervised within the framework of Future-Driven Change.
- Another area of application for scenarios is the strategic innovation management. The future images specify how new markets, products and services, new technologies or new business models might look like – and how they can be linked to the
strategic direction of impact.
Scenarios are an important tool – but they are far from being the only tool which helps companies to prepare for the future. In order to be able to apply scenarios purposefully, they have to be seen in the overall context of the tool box. As a solution ScMI has developed the model of future management, which is explicitly demonstrated in our book ‘Future Management’.