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Scenario Planning

Alaska District November, 2008. Scenario Planning. Charles Yoe, PhD cyoe1@verizon.net. Learning Objectives. At the end of this session participants will be able to: Discuss scenario planning and its uses Identify the steps in scenario planning

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Scenario Planning

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  1. Alaska District November, 2008 Scenario Planning Charles Yoe, PhD cyoe1@verizon.net

  2. Learning Objectives • At the end of this session participants will be able to: • Discuss scenario planning and its uses • Identify the steps in scenario planning • Discuss the nature and importance of scenarios for dealing with uncertainty

  3. “All our knowledge is about the past and all our decisions are about the future” Ian Wilson 1/31/75 Planning in an uncertain world

  4. What if the future is not like the past?

  5. Futures in Planning • Single most likely without project condition exists • Traditional planning approach • Address quantity and model uncertainty within that scenario • More than one possible future and they are significantly different • Scenario planning

  6. When to Use Scenario Planning Consequence Grave Scenario Planning Deterministic Planning Little Uncertainty Much Deterministic Planning Standard Decision Making Minor

  7. Scenario Planning Is Consistent With P&G • It is not an alternative to P&G • Enhancement for situations with significantly different futures possible • Scenario planning modifies tasks in some steps

  8. Traditional P&G Planning • Is largely deterministic • Process relies on a single most likely alternative future forecast • Desire for single right answer • Often anchored in present • Adversarial--legitimate differences in views of uncertain future

  9. Forecasting & Comparing Criteria With & Without Option Comparison Without Condition Baseline Risk Before & After Comparison With Condition Plan Effects Existing Risk Target Gap Analysis Time

  10. Most Likely Future Condition • A single forecast of the future will be wrong • Thus, planning is based on what could be not necessarily what will be • What could be is wide open to debate • We cannot ignore it • The consequences of being wrong may be serious

  11. Scenario Planning • Developed in second half of 20th century (Europe) • Result of failure of traditional planning • Deterministic view of future • Forecasts were wrong

  12. Barrow Coastal Problem Even small projects can be complex!

  13. Barrow’s Coast

  14. Change • Storms and erosion • Global warming • Less ice cover-major issue • Social & economic infrastructure • Cultural consequences

  15. Ivu

  16. Scenarios Are • Narratives • Alternative plausible futures • Significantly different views of the future • Decision-focused views of future • “Movies”-capture evolving dynamics of future • Products of team insight and perception

  17. Scenarios Are Not • Predictions • Variations around a theme • Alternative forecasts of a key variable • Snapshots of an endpoint • Generalized views of feared or preferred futures • Products of outsiders

  18. Scenario Planning Steps Getting Started Laying Environmental-Analysis Foundation Gather data & view ID key decision factors ID critical forces & drivers Conduct focused research on key issues, forces, & drivers • Develop case for scenarios • Get executive support and participation • Define decision focus • Design process • Select facilitator • Form scenario team Scenario Planning Handbook: Developing Strategies in Uncertain Times (Hardcover) by Ian Wilson (Author), Bill Ralston

  19. Scenario Planning Steps Creating the Scenarios Moving from Scenarios to Decisions Rehearse future with scenarios Decision recommendations Identify signposts to monitor Communicate results • Assess importance & predictability/uncertainty of forces/drivers • ID key axes of uncertainty • Select scenario logics to cover uncertainties • Write stories for scenarios

  20. Getting Started • Write out need for SP • Make execs aware of what is coming & their role • Write out description of decision focus • Plan for scenario development activities • Someone to keep process moving • 8-12 diverse members on team

  21. Laying Environmental Analysis Foundation • Gathering necessary information relating to decision problem • Key Decision Factors (KDF)-future events/ outcomes we want to know more about • External and uncontrollable (brainstorm) • Clear statement of scenario focus and ID important uncertainties • “Chapter headings” for scenario

  22. KDF Clusters • Resident behavior • What businesses, residents do? Stay? Go?Grow?Floodproof? • Government policies • Funding? NED/PS? Energy independence • Economy • Strong? Recovery?

  23. Laying Environmental Analysis Foundation • ID critical forces and drivers • Social, economic, political, technological, natural, international • Name of force/driver • Sentence describe what it is • Possible future outcomes • What other forces influence it • What other forces are influenced by it • Prepare needed focus papers (research)

  24. Creating the Scenarios • Assess impact/uncertainty of forces & drivers • ID axes of uncertainty-heart of scenario process • ID clusters of high impact/uncertainty drivers • These are axes • Develop 2 alternate logics for each axis • How drivers work out over time • Plausible but at extreme

  25. Runoff Wetter Light Heavy P-loading Dryer

  26. Scenario Logics • Develop set of scenario logics to describe possible futures • Plausible • Structurally different • Internally consistent • Have utility • Challenge conventional wisdom

  27. Write Story Lines • Critical integration step • Weave threads into coherent patterns • ID cause-effect relationships • See future as whole • Storytelling! • How different logics create different futures • Title • Brief description • Narrative • Comparison table

  28. Runoff Wetter Light Heavy P-loading Dryer From Scenarios to Decisions • Rehearse scenarios • Put team in them and formulate, evaluate, compare • Analyze • Select • Monitor, evaluate, modify

  29. Two Basic Ways to Proceed • Formulate plans for each scenario • Evaluate each plan against each of the four scenarios (e.g., using MCDA results) • Results of this evaluation are compared across plans to select a plan • Which plan does best (robustness) regardless of the future realized?

  30. Another Way to Proceed • Choose one of the four scenarios as most likely • Proceed as usual through the selection process • Evaluate the recommended plan against the other three remaining scenarios • Unacceptable results in any scenario • Adaptive management • Reformulate • Another plan is selected

  31. Take Away Points • Landscape scale problems complex & diverse • Uncertainty is everywhere • Scenario planning to address uncertainty • MCDA needed to address complexity & collaborative planning initiative • Scenario analysis--MCDA in scenario planning context is a potential solution

  32. Questions? Charles Yoe, Ph.D. cyoe1@verizon.net

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