Scenario Planning, or How not to fall for “the sky is falling!” Part 2

By Christopher Peck

As I’m sure you remember from the last post, I was discussing the wonder solution to all our problems: scenario planning. As you no doubt recall, I brilliantly summarized the first half of my argument in this way: we cannot predict the future, trends don’t help us much, knowing which one possible future will occur is impossible, horrible predicted scenarios grab all of our attention. Given all of that, we still need rational planning. We need some way to make decisions in a meaningful way that can guide our actions to best position ourselves for whatever future may come about. Scenario planning to the rescue! To resolve your curiosity, this article will finish what it started, and give you the real scoop on what scenario planning is, and why you should care. Scenarios are short, and creatively-titled, stories that incorporate the significant interactions of major trends, such as rising energy prices, growing fundamentalism, and continued drop- ping prices of computer processing. Playing with the various ways that significant trends can move and interact, a few major scenarios are created. I’ve developed six scenarios with energy and economic and social impacts as our main focus of attention.

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Before I unveil my six, I want to throw one more curve into the mix, a common bell curve. We can use this tool to help us visually conceptualize how the various scenarios might relate to each other.

In this picture we have a mapped bell curve, with eight divisions. (This is actually a picture of IQ distribution in a population, with two more divisions than I’ll use, but it’ll work for our purposes.) We can think of each of the divisions as a possible future scenario, and the percentage in each division as a very rough guess about its future likelihood. The numbers used are to be understood as completely arbitrary, made up numbers, with no real predictive power. They can be better under- stood in a relative sense, as in, “this scenario is somewhat more likely than that one.” When talking about scenarios, I like to use movie and book examples to illustrate. At one end of the spectrum is the Mad Max future: post-apocalyptic, global scale economic and ecological collapse, roving bands of mutant beasts and mad men, oil is hoarded and killed for. At the other end of the spectrum is the Star Trek future: all energy problems are solved, everyone on Earth is conflict free, and we have cool gadgets like transporters, holodecks, and communicators (well, I guess we’ve already got communicators). Are these scenarios possible? Certainly. Are they likely? Probably not. They’re possible but not probable. Moving slightly inward on the curve we have, on the darker side and staying with the movie theme, is 12 Monkeys (Brad Pitt was great in this) scenario. Not total collapse, but totalitarian governmental control, social isolation and restrictive structures. On the lighter side of things, we have a scenario from the book Ecotopia: the lovely sustain- able reworking of all aspects of society, “soft energy” path, peace and harmony, and Strawberry Fields Forever. Clustering around the middle are scenarios closer to our current reality. On the rosier side is The Long Boom (based on a book of the same name by Peter Schwartz, scenario planner extraordinaire), which extends the past 20 years of growing global prosperity, technological progress, access to capital, but with real ecological and social challenges, into the next 20 years. On the other side is a similar scenario: The Long Decline. In this scenario ecological limits are pushed with consequences, energy becomes increasingly more expensive, standards of living and quality of life decline. To summarize my mix of six, from dystopia to utopia: Mad Max, 12 Monkeys, The Long Decline, The Long Boom, Ecotopia, and Star Trek. This is not a super sophisticated series of scenarios; you could generate your own list pretty easily. Scenarios help define possibilities, considerations we need to take in our planning. But they also help us stay flexible about the future and guide our planning so that we don’t bet the farm on one possible scenario. For example, many of us would think it foolish to wait around for the Star Trek solution: too much fantasy, probably not based on real human dynamics. At the same time we should- n’t bet our entire lives on the Mad Max future: there is human goodness and creativity, and considerable inertia in the system to keep it functioning. Good planning takes into account all of the possible scenarios, to make sure that you’re not betting the farm on one possible outcome, but can survive and thrive given any possible future. In the third half of this article, coming next newsletter, I’ll discuss how you can convene a scenario planning group in your community, and some of the practical considerations for your financial life.

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Christopher Peck

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