Scenario planning is a systematic method of analysing the future that involves creating coherent, plausible descriptions of different future developments. Unlike traditional forecasting, which attempts to predict a single 'most likely' future, scenario planning assumes uncertainty and creates alternative visions to help strategic decision-making under conditions of uncertainty.
This method does not aim to predict the future, but to prepare the mind for different possible developments. Scenarios serve as 'mental gymnastics' that allow decision-makers to better understand the complexity of problems and prepare for unpredictable situations.
Origins: the military roots of scenario planning
The Second World War era
Although elements of scenario thinking can be traced back to ancient military strategies, modern scenario planning was born during the Second World War. The US armed forces were faced with the need to plan complex operations under conditions of great uncertainty.
The planning of the D-Day operation (Normandy landings, 1944) required the preparation of different scenarios depending on weather conditions, the German reaction and the situation on other fronts. The Allies had to anticipate various options for how the situation could develop and prepare appropriate plans of action.
Creation of the RAND Corporation
The real breakthrough came in 1946 with the creation of the RAND Corporation (Research and Development), a think tank established by the US Air Force.
RAND was created to conduct research on military strategy in the nuclear age, where traditional planning methods were proving inadequate. In 1947, RAND begins the first formal scenario planning projects under the direction of General Curtis LeMay, and as early as 1950, Theodore Kahn joins RAND and begins the development of a scenario methodology similar to today's form.
Key people in the development of scenario planning
There are several figures who can be considered as forerunners of scenario methods - particularly in the civilian aspects of their applications.
Herman Kahn - father of modern scenario planning
Herman Kahn (1922-1983) is widely recognised as the founder of modern scenario planning. Working at the RAND Corporation from 1947, Kahn developed a systematic approach to scenario analysis in the context of nuclear strategy. His landmark book On Thermonuclear War (1960) introduced scenarios as a tool for thinking about the 'unthinkable' - nuclear war.
Kahn introduced the key principles of scenario planning: scenarios must be plausible, internally consistent, relevant to decision-makers and diverse in their assumptions. In 1961, he founded the Hudson Institute, which continued to develop scenario methodology.
Pierre Wack and the Royal Dutch Shell team
Pierre Wack, a French planner working for Royal Dutch Shell, took scenario planning from the military world to the corporate world. In the 1960s, Shell faced the challenge of planning investments in an oil industry characterised by long investment cycles and high uncertainty.
Other important forms of this method include:
- Bertrand de Jouvenel – French futurist, author of „The Art of Conjecture” (1967),
- Michel Godet– founder of the French prospective school,
- Peter’a Schwartz’a - founder of the Global Business Network (GBN),
- Kees’a van der Heijden’a - theorist and practitioner of scenario planning.
Ground-breaking applications in the private sector
Sukces Royal Dutch Shell
The most spectacular early success of scenario planning was Royal Dutch Shell's prediction of the oil crisis of the 1970s. In 1970, Shell's scenario planning team, led by Pierre Wack, developed scenarios that assumed a dramatic rise in oil prices.
Shell and the oil crisis: When the Yom Kippur War broke out in October 1973 and Arab oil countries imposed an oil embargo, Shell was the only major oil company prepared for this development. The company quickly adapted to the new situation, while competitors were caught by surprise. As a result, Shell moved from its position as a weak seventh player in the market to become the second largest oil company in the world.
Shell's success led to the spread of scenario planning in the corporate sector. The company continued to use this method, predicting the collapse of the Soviet Union, the development of renewable energy and climate change, among other things.
Evolution of the methodology
1960s-70s: systemisation of the approach
During this period, scenario planning evolved from an intuitive tool into a systematic methodology. Key elements included:
- identification of key factors influencing the future,
- analysis of uncertainty and critical variables,
- constructing logically coherent narratives,
- testing the strategy against different scenarios.
1980s-90s: democratisation and computerisation
The development of personal computers and software has enabled the wider use of scenario planning. Specialised software tools have emerged and the methodology has become available to smaller organisations.
The 21st century: scenario planning in the digital age
Modern scenario planning uses advanced technology:
- artificial intelligence for data analysis,
- computer modelling and simulations,
- crowdsourcing and the wisdom of the crowd,
- online collaboration platforms.
Applications in public administration
Defence planning
Scenario planning remains a key tool in defence planning. NATO regularly conducts scenario exercises, looking at different conflict and threat options.
Following Russia's annexation of Crimea in 2014, NATO countries developed scenarios for potential aggression against the Baltic States. These scenarios included various options for hybrid action, cyber attacks and conventional military action.
Public policy and spatial planning
Governments around the world use scenario planning to, among other things:
- pandemic response planning (COVID-19 scenarios),
- adaptation to climate change,
- infrastructure development planning,
- energy policy and energy security.
An important aspect in this context is the use of predictive methods for the development of civil society. Scenario research, by the way, creates a mechanism for public participation as a result of the involvement of a broad spectrum of specialists and the dissemination of results. What we have, therefore, is a unique process of strengthening public participation mechanisms and developing widespread strategic planning mechanisms. An excellent example of this type of activity is the Polish Agenda for Digital Resilience 2040.
Contemporary business applications
Strategic planning
Today's corporations use scenario planning in a variety of contexts:
Amazon and the future of e-commerce: Amazon regularly develops scenarios for the future of e-commerce, logistics and technology. These scenarios include developments in artificial intelligence, changes in consumer behaviour, government regulation and competition. Based on these analyses, the company makes investment decisions in new technologies and markets.
Financial risk management
Banks and financial institutions use scenario-based stress testing to assess resilience to financial crises. Regulators such as the European Central Bank require banks to carry out regular scenario testing.
Technology industry
Technology companies use scenario planning to anticipate the development of technologies and markets:
- Microsoft - cloud computing and AI development scenarios,
- Tesla electric vehicle adoption scenarios,
- Google - scenarios for the future of search and online advertising.
Challenges and criticism
Limitations of the methodology
Despite its advantages, scenario planning has some limitations:
- the tendency to create scenarios that reflect current beliefs,
- the difficulty of anticipating disruptive innovations,
- Risk of decision paralysis with too many scenarios,
- the cost and time-consuming nature of the process.
Black swans and unpredictability
Nassim Taleb, author of the 'black swan' theory, criticises scenario planning for failing to take into account events with low probability but huge impact. Events such as the 11 September 2001 attacks or the COVID-19 pandemic demonstrate the limitations of traditional scenario planning.
Contemporary innovations in scenario planning
The use of big data and AI
Modern scenario planning uses:
- machine learning algorithms for pattern identification,
- sentiment analysis on social media,
- Monte Carlo simulations,
- modelling of complex systems.
Participatory scenarios
Contemporary approaches increasingly involve diverse stakeholders in the scenario development process, using:
- online scenario workshop,
- crowdsource platforms,
- simulation games,
- design thinking methods.
Particularly the first and the last of the interchangeable examples of participation are used by the PTC in its mission to popularise predictive methods.
The future of scenario planning
There are clear developmental trends in the evolution of commonly used methodologies. Scenario planning is evolving towards:
- automation AI will increasingly support the creation of scenarios,
- personalisation: scenarios tailored to specific organisations and contexts,
- interaktywności: dynamic scenarios updated in real time,
- Integration: connection to business intelligence systems and management dashboards.
New areas of application
The emergence of new application areas for scenario planning is evident. Predictive methods find application in:
- cyber security,
- biosafety and biotechnology,
- space exploration,
- behavioural analyses and the development of artificial intelligence,
- smart city planning.
The history of scenario planning shows the evolution from a military strategic analysis tool to a universal methodology to support decision-making under uncertainty. From the pioneering work of Herman Kahn at the RAND Corporation, to the spectacular successes of Shell, to its contemporary applications in the digital age, scenario planning has proven its value as a tool for preparing for an unpredictable future.
The key to successful scenario planning is not to predict the future, but to prepare the mind for different possibilities. In a world characterised by increasing complexity, uncertainty and the pace of change, scenario planning remains one of the most important tools for strategic thinking.
The future of this methodology will be shaped by integration with new technologies, greater stakeholder participation and application to new emerging fields. Scenario planning, which was born out of the need to think about nuclear war, today helps us prepare for the challenges of artificial intelligence, climate change and global interdependence. Domestically, this method can form the basis of an integrated public safety system or the search for new spaces of concreteness for businesses in an age of uncertainty. It is worth mentioning PTC's achievements in this area in the form of an analysis, carried out a few years ago, of potential future sources of competitiveness for the Polish economy.
Ultimately, the value of scenario planning lies not so much in the accuracy of the predictions, but in its ability to expand mental horizons and prepare organisations for a multitude of possible futures. This is a lesson that remains relevant from the days of the RAND Corporation to today's global corporations and governments around the world. In the Polish specificity, in addition to the participatory aspect and the development of civil society, the development of predictive research may be an opportunity for the construction of a mature, emergent strategic planning system integrating the economic goals of the state and its development potentials with the policies of the business sector.