Scenario Planning and Traditional forecasting

Scenario Planning

Scenario Planning provides innovators with the ability to probe into the future to assess the likelihood of something being developed based on current technologies.  In the Scenario Planning video presented by Woody Wade, he stated that Albert Einstein’s response to a question relating to the future was “I never think about the future, it gets here on its own.”  Wade stated that scientists look at the future very differently than a professional who looks to the future to get an idea that could make the prospect of the future better.

Scenario planning consists of an altered future where decisions made today will take effect at that time.  When developing scenarios, they should be tailored to fit the context at hand.  Scenarios are just like a story – they have a beginning, middle and end and contain plots lines that can weave all over the place which depicts how future trends can modify outcomes.  There are four major trends that need to be taken into consideration when developing scenarios; they are Political – Economic – Societal – Technical or PEST.

Traditional forecasting

Traditional forecasting utilizes one or more of a series of models such as Trending, extrapolation and curve fitting methods.  There is also adoption and penetration models, causal and multivariate methods, time-series analysis, agent based models and tracker and bottom-up models.  All of which utilize past trends and time lines to forecast future eventualities.

Comparing and Contrasting

Both the scenario planning and traditional forecasting methods are not perfect as they attempt to predict future happenings.  The former, scenario planning has an advantage due to the use of multiple scenarios and taking future trends into consideration and finding the median possibility between the best case and worst case scenarios while the latter utilizes past indicators and mathematics to develop future predictions.

References

Ogilvy, J. (2015, Jan, 8). Scenario Planning and Strategic Forecasting. Retrieved from Forbes / Washington Web Site: http://www.forbes.com/sites/stratfor/2015/01/08/scenario-planning-and-strategic-forecasting/#221221226b7b

Traditional Forecasting and Modeling Methods. (n.d) Retrieved from Daniel Research Group - Understanding the Future Web Site: http://www.danielresearchgroup.com/WhatWeDo/ForecastsandMarketModels/TraditionalForecasting.aspx

Wade, W. (2014, Sep, 3). Woody Wade: “Scenario Planning” - Thinking Differently about Future Innovation. Retrieved from GLOBIS.JP - Gateway to the new Japan Web Site: http://e.globis.jp/article/000363.html