Scenario Planning and Innovation

How does scenario-type planning support planning and innovation for change? 

A business can use traditional forecasting methods to predict about the future. These methods, however, are not effective because predicting what the future may unfold is not very certain. Besides, traditional forecasting does not help to prepare for catastrophic events that may occur in the future. This is because forecasting may be limited or biased to under-predicting or over-predicting. Kodak is a typical example of a company that failed to do proper scenario planning. Despite its continued success in the 20th century, the invention of the digital cameras in 1975 significantly led to the downfall of the Kodak company because it failed to tap and adapt with the new technology (Teneja, 2021). As such, it is important to use other approaches such as the scenario planning method to help identify and prepare for possible alternatives and uncertain future events.

In contrast to traditional forecasting approach, scenario planning helps to creatively think and prepare for possible uncertain scenarios that may occur in the future. In this regard, a scenarios can be defined as “...description of a future situation and the course of events which allows one to move forward from the actual to the future situation” (Amer et al., 2013, p.23). Scenario planning is an effective tool that is applicable in complex situations and when the rate of uncertainty is very high. Instead of predicting the future, scenario planning helps to identify a set of possible opportunities and scenarios that can be managed to help a business achieve long-term and short-term strategic business goals.

What forces are involved, and what impacts do they make?

Using scenario planning, a business can be able to identify future scenarios and the driving forces that can turn the scenarios into a reality. As shown in the figure below, the first crucial step in scenario planning is identifying the driving forces. The forces can include political, social, economic, or technological advancements. Once the forces have been identified, the next is to uncover uncertainties such as prices, competition, and consumer trends that are likely to affect the operations of a business. Next involves identifying four scenarios, and assessing the impacts as well as implications of each of the scenarios. This way, it becomes possible to identify innovations and strategies that can help to achieve a higher competitive advantage in the future. 

 

   

Figure 1: Scenario development process (Mariton, 2016)

How will you use scenario planning for future innovation efforts?

In the future, I am planning to start a software development company. With this initiative, I will consider using scenario planning to identify innovative products that can help gain a higher competitive advantage and to meet demands driven by the COVID-19 pandemic. In the process, it will become possible to identify how emerging technologies such as big data and analytics, Internet of Things and artificial intelligence can be incorporated into the products to meet consumers’ needs. Besides, addressing how cybersecurity might evolve in the future will help ensure that the products comply with legal and regulatory requirements.

Does the scenario plan account for the social impact of change?

Definitely the plan accounts for the social impact of change because it addresses how future consumers’ needs and the outbreak of a future pandemic can affect the efforts and operations of the business. This can help to adapt and respond to future life changes so as to stay relevant.

 

 

 

Reference List

Amer, M., Daim, T. U., & Jetter, A. (2013). A review of scenario planning. Futures, 46, 23-40.

Mariton, J. (2016, March). What is Scenario Planning and How to Use It. Retrieved January 3, 2022, from https://www.smestrategy.net/blog/what-is-scenario-planning-and-how-to-use-it

Taneja, Y. (2021, November). Why Did Kodak Fail? | Kodak Bankruptcy Case Study. Retrieved January 3, 2022, from https://startuptalky.com/kodak-bankruptcy-case-study/