Compare and contrast the concepts of scenario planning versus traditional forecasting



Compare and contrast the concepts of scenario planning versus traditional forecasting: 


Scenario planning considers several potential pathways forward into the future, usually dependent on different forces that would impact each scenario. The result is a range of possibilities for future evolution where the risks and uncertainties are unknown. As cited in the Woody Wade Scenario Planning video, "nobody has a crystal ball" (Wade & Nakamura, 2014). In his book "Scenario Planning: A field guide to the future" a key argument for scenario planning, over forecasting, is that the future will be different from the present. Another reason for scenario planning, as stated in the video would be in a business or professional setting or even in one's life, says that anticipating the future can give companies an edge via the ability to react in anticipation of future changes.  


At the same time, future scenarios do not equal predictions. However, the thought process could explore different future visions that could eventually become a reality by thinking about the range of possibilities. Scenario analysis may also refer to "what if?" scenarios as the same idea. As trends and events evolve, some scenarios may become more likely than others. Then, on the other hand, the future could hold the unexpected or commonly known as a black swan event or wild card due to an unforeseen incident. Black swan events may not impact everyone or every business the same and may have no impact on specific areas or sectors (Wade & Wagner, 2012). Often in hindsight, the black swan turns out it was right under our nose but went unnoticed, or people failed to react pre-emptively for some reason. In contrast, Wade urges a need to escape the tyranny of the present such as the example where organizations' strategic planning process relies on forecasts of the same current state trends into the future without capturing potential deviations. Most organizations stop at three sets of forecasted outcomes: (1) Most likely, (2) best-case, and (3) worst-case scenarios.    


Fully explain both concepts so that the reader understands the differences, advantages, and disadvantages of each: 


            Early warning signals were one concept raised by an audience member in Wade's scenario planning video. Wade elaborated on early warning signals by describing who needs to get included in the scenario analysis planning meeting needs to consist of a smattering of trusted stakeholders from diverse areas to collaborate on ideas as part of the exercise.  One key is to maintain trust and confidentiality, so the information doesn't fall into the company's rival's hands as it represents the intellectual property. He suggested inviting a journalist and a sociology professor to speak to consumers' changing attitudes. After selecting the composition of the scenario planning team, encourage participation.   Consumers' changing attitudes point to a potentially significant force that could impact or disrupt future trends (Frum, 2013). Frum describes the World Association of Newspapers (WAN) and the scenario planning to look at four systems shaping or disrupting the newspaper industry by 2020. In this case, 19 newspaper executives from 15 countries gathered to map out a scenario cross diagram and illuminate the strengths, weaknesses, opportunities, and threats (SWOT) affecting the newspaper business brought about by innovation. The four scenarios explored in the cross diagram included:

A. Disruptive media prevails with targeted audiences,

B. Traditional media prevails with targeted audiences,

C. Traditional media prevails with mass audiences, and

D. Disruptive media prevails with mass audiences.

The main goal of the planning session was how to remain relative and survive as a newspaper company in the age of social media and disruptive consumer audience types, technologies, and preferences. The group explored various beneficial opportunity scenarios and adverse threats. 


References:


Frum, D. R. (2013, August 6). World Association of Newspapers Scenario Planning. Personal Expert System. Retrieved January 18, 2022, from http://personalexpertsystem.blogspot.com/2013/08/world-association-of-newspapers.html 


Globis Insights. (2014). Scenario Planning: Thinking Differently about Future Innovation. Globis Insights. Retrieved January 18, 2022, from https://globisinsights.com/career-skills/strategy/scenario-planning/.


Wade, W., & Wagner, N. (2012). Scenario planning a field guide to the future. Amazon Kindle. Wiley. Retrieved January 18, 2022, from https://read.amazon.com/?asin=B007LHHQKM. ISBN:‎ 1118170156

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