Scenario Planning and Horizon Scanning

Shadow of an airplane crossing a motorwayWhen conducting risk assessments organisations are increasingly being forced to explore risks and disruptive threats further than the short or medium term. Typically, most companies cannot realistically look more than six months into the future with any degree of confidence for strategic planning. Black Swan events and the complications of globalisation make even six months too vague for many. Complexity has led to an obscuring of cause and effect — executives understandably can get blinkered and tunnelled in their own thought processes.

Strategic anticipation or foresight is becoming an important capability to assist decision making when confronted with increasing global risks and economic/geopolitical turbulence. A degree of uncertainty has always been a business reality, but today it is the extent of the uncertainty and the potential consequences that make organisations cautious and apprehensive about directions and decisions. Uncertainty cannot be managed as by its very nature it is incalculable, but organisations can reduce their vulnerability to it. New approaches are now required; understanding the mistakes of the past can be informative, but hindsight will not necessarily inform or help with foresight.

As a result, businesses must make an effort to develop scenarios, consider likely future events and apply futures methodologies. Tools such as horizon scanning help generate new insights based on social and environmental monitoring, or distributed sensing capability, which allow one to make sense of an emerging threat, issue or trend. As a logical extension of scenario planning, horizon scanning can be used alongside techniques such as crowd sourcing, trend analysis, phase transition and experiential learning, to generate ideas about likely future risks, issues and opportunities.

It is vital that corporations, when faced with continuous anxiety and uncertainty, become skilled at spotting trends. They also need to acquire the techniques of pattern recognition and horizon scanning to generate strategic options and guide decision-making. At CICM we are skilled at helping your organisation to become more agile and resilient, to reduce vulnerability to uncertainty.

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