Scenario Planning

Input: $ARGUMENTS

Overview

The future is uncertain. Instead of trying to predict the one future, scenario planning develops multiple plausible futures and prepares strategies that work across them.

This isn’t forecasting (predicting what will happen) but foresight (preparing for what might happen).

Steps

Step 1: Frame the Decision

1. What decision or strategy needs to be robust against future uncertainty?
2. What is the time horizon? (1 year, 5 years, 10 years?)
3. What would make the decision succeed or fail?
4. What are you most uncertain about?

Step 2: Identify Key Uncertainties

List the forces that could shape the future, then classify:

Select the 2 most impactful uncertainties that are genuinely unpredictable. These become your scenario axes.

Rules for good axes:

• Must be genuinely uncertain (not just “will it rain tomorrow”)
• Must be high impact on your decision
• Must be independent of each other
• Should be binary or spectrum (not multi-valued)

Step 3: Construct Scenario Matrix

Cross the two uncertainties to create 4 scenarios:

                    Uncertainty 1: HIGH
                         |
    Scenario B           |          Scenario A
    [name]               |          [name]
                         |
Uncertainty 2: LOW ------+------ Uncertainty 2: HIGH
                         |
    Scenario D           |          Scenario C
    [name]               |          [name]
                         |
                    Uncertainty 1: LOW

Step 4: Develop Each Scenario

For each of the 4 scenarios, flesh out:

1. Name: Give it a memorable, evocative name
2. Narrative: What does this world look like? How did we get here?
3. Key characteristics: What defines life/business/work in this scenario?
4. Winners and losers: Who thrives? Who struggles?
5. Early indicators: What signals would tell us this scenario is materializing?
6. Timeline: What happens in year 1, year 3, year 5?

Quality check:

• Each scenario should be internally consistent
• Each should be plausible (not just possible)
• Together they should feel like they genuinely cover the range of futures
• None should be obviously “the right one”

Step 5: Test Strategies Against Scenarios

For each strategy option you’re considering:

Strategy types:

• Robust: Works OK in all scenarios (may not be optimal in any)
• Adaptive: Starts one way, has pivot points for different scenarios
• Hedged: Diversified bets across scenarios
• Big bet: Optimized for one scenario (high reward if right, high risk if wrong)

Step 6: Identify No-Regret Moves

Actions that are valuable regardless of which scenario unfolds:

1. What improves your position in ALL scenarios?
2. What builds optionality (ability to pivot)?
3. What reduces downside in worst scenarios?
4. What preserves the ability to act later?

Step 7: Set Up Monitoring

For each scenario, define:

1. Leading indicators: What signals would appear FIRST?
2. Trigger points: At what point should you adjust strategy?
3. Review schedule: How often to reassess which scenario is materializing?

Step 8: Report

SCENARIO PLANNING:
Decision: [what needs to be robust]
Time horizon: [years]
Key uncertainties: [axis 1] × [axis 2]

Scenarios:
| Scenario | Name | Key Feature | Probability Estimate |
|----------|------|-------------|---------------------|
| A | [name] | [defining characteristic] | [rough %] |
| B | [name] | [defining characteristic] | [rough %] |
| C | [name] | [defining characteristic] | [rough %] |
| D | [name] | [defining characteristic] | [rough %] |

Strategy assessment:
| Strategy | A | B | C | D | Robustness |
|----------|---|---|---|---|-----------|
| [option] | [+/-/0] | [+/-/0] | [+/-/0] | [+/-/0] | [score] |

No-regret moves: [actions good in all scenarios]
Recommended approach: [robust/adaptive/hedged/big bet]
Monitoring: [key indicators to watch]

When to Use

• High uncertainty about future conditions
• Long time horizons
• Decisions that are hard to reverse
• Need to challenge assumptions about the future
• Strategic planning in volatile environments
• → INVOKE: /fss (future state scanning) for systematic future analysis
• → INVOKE: /rm (risk management ordering) for risk-based prioritization

Verification

• Key uncertainties are genuinely unpredictable and high-impact
• 4 scenarios developed (not just best/worst case)
• Each scenario is plausible and internally consistent
• Strategies tested against ALL scenarios (not just the expected one)
• No-regret moves identified
• Monitoring indicators defined